Overview
French President Emmanuel Macron’s December 2025 warning that Europe could slap U.S.-style tariffs on Chinese goods if Beijing fails to curb its ballooning trade surplus with the EU marks a sharp escalation in Europe’s pushback against China’s export‑heavy model. In an interview after his state visit to China, Macron argued that China’s surplus is “killing” its European customers and framed the issue as a “life or death” struggle for EU industry, especially autos and advanced manufacturing.
Macron’s threat sits atop a broader arc that began in 2023 with an EU anti‑subsidy probe into Chinese electric vehicles and has since expanded into a full‑spectrum economic security strategy: anti‑dumping duties, de‑risking supply chains, and responses to Chinese controls on rare earth exports. With the EU’s trade deficit with China exceeding €300 billion in 2024 and China’s global goods surplus surpassing $1 trillion in 2025, European leaders now openly discuss using the bloc’s trade defence tools—and possibly broader tariffs—risking a cycle of retaliation that could reshape global supply chains.
Key Indicators
People Involved
Organizations Involved
The EU is a 27‑member political and economic union that holds exclusive competence over trade policy, including tariffs and trade defence investigations.
The European Commission proposes EU legislation, implements decisions, and manages the bloc’s trade defence instruments.
The French Presidency under Emmanuel Macron has been a leading advocate for tougher EU trade and industrial responses to China.
China is the EU’s largest source of imports and a major export market, with a rapidly growing trade surplus driven by high‑tech and green manufacturing exports.
Timeline
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China’s trade surplus tops $1 trillion as EU tensions mount
Economic DataChina’s customs data show its goods trade surplus surpassing $1 trillion in the first 11 months of 2025, with exports to the EU rising even as shipments to the U.S. fall—fueling European arguments that Chinese overcapacity and a weak renminbi are undercutting EU industries.
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German foreign minister heads to Beijing amid harder EU line
DiplomacyGerman Foreign Minister Johann Wadephul travels to Beijing for his first official visit, aiming to address rare earth and chip export curbs and to signal Berlin’s support for ending unfair trade practices while maintaining dialogue. His trip follows Macron’s visit and coincides with the EU’s wider economic security push.
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Macron threatens China with EU tariffs over soaring trade surplus
Public StatementIn an interview with Les Echos published after his trip, Macron reveals he has warned Beijing that Europe will be "forced to take strong measures"—including Trump‑like tariffs on Chinese goods—if China does not move to reduce its trade surplus with the EU. He calls the situation "life or death" for European industry, particularly autos.
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Macron’s state visit to China focuses on trade imbalance
DiplomacyDuring a state visit to China, including a stop at Sichuan University in Chengdu, Emmanuel Macron presses Chinese leaders on what he calls "unsustainable" trade imbalances, warning that China’s model risks "killing" its European customers.
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EU unveils ReSourceEU to cut raw material dependence on China
Policy AnnouncementThe European Commission launches ReSourceEU, a €3 billion plan to diversify sources of critical raw materials away from China. The strategy includes EU‑backed mining projects, joint purchasing and potential legislation to force companies to diversify their suppliers if voluntary efforts fall short.
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China issues first streamlined rare earth 'general licences'
De-escalation MoveChina issues a first batch of streamlined "general licences" for rare earth exports—valid for one year and tied to specific customers—following a summit between Xi Jinping and U.S. President Donald Trump. The step partly eases supply disruptions but keeps Beijing’s leverage in place.
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China tightens rare earth export controls
Export ControlIn April 2025, China expands its export control list and dual‑use licensing requirements for rare earths and related magnets, citing national security. The move sharply reduces exports in the following months and disrupts global, especially automotive, supply chains, alarming European manufacturers.
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EU countries vote on making EV tariffs definitive
Policy DecisionEU member states hold a qualified‑majority vote on whether to confirm additional EV tariffs for five years. The outcome, complicated by possible abstentions, determines whether the Commission proceeds alone, underscoring internal divisions over how hard to confront China.
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EU imposes provisional tariffs on Chinese EVs
Legal ActionFollowing its anti‑subsidy investigation, the European Commission imposes provisional additional tariffs on Chinese electric vehicles on top of the existing 10% car duty, arguing that subsidies pose a threat of serious injury to EU producers. Chinese officials label the investigation selective and in violation of WTO rules.
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Von der Leyen warns Xi EU will "make full use" of trade defence tools
DiplomacyAfter a three‑way meeting with Emmanuel Macron and Xi Jinping in Paris, von der Leyen publicly warns that Europe is ready to fully deploy its trade defence instruments against Chinese market‑distorting subsidies in EVs, steel and other sectors, signalling that Brussels is prepared for a potential trade war.
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China condemns EU EV probe as 'blatantly protectionist'
Public StatementChina’s Commerce Ministry and auto industry bodies sharply criticise the EU’s EV investigation, calling it 'blatantly protectionist' and warning it will distort the global automotive supply chain and harm climate cooperation.
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EU launches anti-subsidy probe into Chinese electric vehicles
InvestigationIn her State of the Union speech, European Commission President Ursula von der Leyen announces an anti‑subsidy investigation into low‑cost, China‑made electric vehicles, citing massive state subsidies and a flood of cheap imports threatening EU carmakers.
Scenarios
Managed De-escalation: Targeted Tariffs, Quiet Quotas and Investment Deals
Discussed by: European policy analysts, trade lawyers, and centrist EU governments
In this scenario, Macron’s threats contribute to a tougher EU bargaining position, but both sides avoid an all‑out trade war. The EU locks in targeted tariffs—primarily on Chinese EVs and a few other subsidised sectors—while offering Beijing a path to reduce tensions via voluntary export restraints, increased Chinese investment in European plants, and a more balanced procurement environment. China responds by dialling down some overcapacity exports to Europe and maintaining relatively generous rare earth licences for EU manufacturers, similar to the compromise that ended the 2013 solar panel dispute. Trade remains contentious but contained, and both sides signal that climate and industrial cooperation still matter.
Rolling Trade War: Broad EU Tariffs and Chinese Retaliation on Raw Materials
Discussed by: More hawkish European think tanks, some U.S. analysts, and Chinese state media warning of escalation
Here, EU politics move in Macron’s direction: Brussels expands tariffs beyond EVs to cover solar panels, batteries, steel and possibly broader categories of manufactured imports. China responds with higher tariffs on European goods and more restrictive implementation of rare earth and technology export controls, using licensing delays and opaque criteria to punish specific EU industries. Over time, the dispute begins to resemble the U.S.–China trade war of 2018–2020, with hundreds of billions of euros in trade affected, supply chains re‑routed via third countries, and WTO cases piling up.
EU Split and Policy Drift: Macron Isolated, Germany and Others Block Broad Tariffs
Discussed by: Business lobbies, German industry groups, and some EU diplomats
In this scenario, Macron’s rhetoric fails to secure a qualified majority of member states for sweeping new tariffs. Germany and several export‑heavy or China‑dependent countries either oppose or abstain, leaving the Commission to rely on narrower, highly technical trade defence cases and slow‑moving economic security tools. The EU’s stance hardens at the margin—more investment screening, diversification funding—but the bloc stops short of the kind of across‑the‑board tariffs the U.S. has imposed. This outcome preserves short‑term business ties but risks prolonging the structural imbalance Macron has decried.
Transatlantic Alignment: EU Gradually Adopts U.S.-Style China Tariff Architecture
Discussed by: U.S. trade hawks, some European security strategists
Under this pathway, rising geopolitical tensions and evidence of continued Chinese overcapacity push the EU closer to Washington’s approach. After the U.S. maintains or even expands its Section 301 and blanket tariffs on Chinese goods, Europe gradually layers on its own thematic tariffs tied to security and industrial goals—targeting critical technologies, green supply chains, and inputs for defence. Coordination with the U.S. on export controls and rare earth access deepens, and Beijing increasingly treats the transatlantic partners as a bloc, further politicising trade.
Historical Context
EU–China Solar Panel Dispute (2012–2013)
2012–2013 (with measures lasting until 2015/2018)What Happened
In the early 2010s, European solar manufacturers accused Chinese rivals of dumping heavily subsidised solar panels in the EU at below‑cost prices, threatening to wipe out local industry. The European Commission imposed provisional anti‑dumping duties of 11.8%, rising to a possible 47.6%, but after strong opposition from some member states, especially Germany, Brussels and Beijing struck a compromise in 2013: a minimum price undertaking and volume cap for Chinese exports rather than across‑the‑board high tariffs.
Outcome
Short term: The deal defused the immediate trade conflict and avoided a broader tariff war extending to other goods like wine and steel, but European solar manufacturers argued the minimum prices were still too low to prevent damage.
Long term: Europe’s solar manufacturing base was significantly weakened, while China solidified its dominance in solar panel production. The episode now serves as a cautionary tale in Brussels about the risks of under‑reacting to subsidised Chinese overcapacity—one von der Leyen explicitly cites when justifying the EV probe.
Why It's Relevant
The solar case shows both the political difficulty of sustaining tough measures against China inside the EU and the long‑term industrial cost of compromise—exactly the dilemma EU leaders face again over EVs and other green technologies.
U.S.–China Trade War and Section 301 Tariffs (2018–present)
2018–2025What Happened
Beginning in 2018, the United States launched a series of Section 301 tariffs on Chinese imports, initially targeting about $50 billion in goods before expanding duties to cover more than $370 billion worth of products, citing unfair trade practices and industrial policies such as "Made in China 2025". Subsequent administrations adjusted but largely maintained these measures, and by 2025 President Donald Trump had added a 20% blanket tariff on all Chinese goods, plus elevated duties on selected strategic sectors.
Outcome
Short term: The tariffs triggered Chinese retaliation, raised costs for importers, and led to trade diversion and complex exemption processes, but they also created a new baseline in U.S. policy: high structural tariffs on Chinese goods are now politically entrenched.
Long term: Both countries partially decoupled in some sectors, and U.S. allies—including the EU—studied Washington’s playbook while trying to avoid outright alignment. The U.S.–China trade war normalized the idea of broad, politically driven tariffs as a tool of strategic competition.
Why It's Relevant
Macron explicitly cites U.S. measures as a template for potential EU tariffs, and Beijing’s experience with U.S. tariffs informs its posture toward Europe. The trade war also illustrates how once‑temporary tariffs can become a semi‑permanent feature of the economic landscape.
Rare Earths Dispute at the WTO (2010–2014)
2010–2014What Happened
Around 2010, China sharply reduced export quotas on rare earth elements, tungsten and molybdenum, causing global price spikes and prompting companies to worry that Beijing was weaponising its near‑monopoly over processing. The United States, European Union and Japan jointly challenged these policies at the WTO, arguing that China’s export duties and quotas violated its accession commitments.
Outcome
Short term: WTO panels and the Appellate Body ruled against China, finding the export restraints inconsistent with WTO obligations and rejecting Beijing’s conservation and environmental justifications. China subsequently removed the quotas and duties in their existing form.
Long term: The case highlighted both China’s leverage in critical raw materials and the limits of WTO rules in constraining newer, more fine‑grained export control tools like licensing systems. Today’s Chinese rare earth export licences and the EU’s response through ReSourceEU and its economic security doctrine are, in part, shaped by this earlier legal and political experience.
Why It's Relevant
The rare earths dispute offers a direct precedent for current tensions: China is again using controls over critical inputs, but in a more sophisticated way, while the EU and U.S. try to reduce dependency and consider new WTO‑compatible responses.