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.
The EU’s trade deficit with China exceeded €300 billion in 2024, underscoring the structural imbalance Macron calls “unsustainable.”
≈60%
Increase in EU goods trade deficit with China since 2019
The EU’s goods trade deficit with China has surged by nearly 60% since 2019, intensifying political pressure for tariffs and other defensive tools.
$1.08tn
China’s global goods trade surplus (first 11 months of 2025)
China’s goods trade surplus reached about $1.076 trillion in the first 11 months of 2025, driven partly by booming exports to the EU and Southeast Asia.
2.5m + 10.3m
Direct and indirect EU auto jobs at risk
The European Commission has warned that unfairly subsidised Chinese EV imports threaten 2.5 million direct and 10.3 million indirect jobs in the EU auto sector.
90%
EU share of permanent magnets imported from China
Roughly 90% of the EU’s permanent magnets—critical for EVs and wind turbines—are imported from China, a key vulnerability behind Brussels’ new ReSourceEU raw materials strategy.
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Eleanor Roosevelt
(1884-1962) ·Progressive Era · politics
Fictional AI pastiche — not real quote.
"Trade wars, like all wars, begin with the delusion that we can prosper by impoverishing our neighbor. If Europe and China cannot find the wisdom to balance their ledgers through negotiation rather than escalating barriers, both sides will discover that tariffs are a tax paid not by foreign governments but by their own citizens—and that in our interconnected world, there are no victors in a race to mutual isolation."
0% found this insightful
Mark Twain
(1835-1910) ·Gilded Age · wit
Fictional AI pastiche — not real quote.
"I see Mr. Macron has discovered what every cardsharp on the Mississippi already knew: when your opponent keeps winning every hand, you can either accuse him of cheating or admit you never learned to count cards. The French President calls it "life or death" for European industry, but it seems to me that threatening a tariff war with your largest supplier is rather like threatening to shoot your pharmacist because his medicine costs too much—you may feel righteous in the moment, but you'll still need those pills come morning."
0% found this insightful
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People Involved
Emmanuel Macron
President of France (Leading calls for tougher EU trade measures against China)
Ursula von der Leyen
President of the European Commission (Architect of EU de-risking and trade defense push against China)
Xi Jinping
President of the People’s Republic of China (Defending China’s export-led growth model and using export controls as leverage)
Stéphane Séjourné
EU Industry Commissioner (Driving EU strategy to cut raw material dependence on China)
Johann Wadephul
Foreign Minister of Germany (Seeking to balance Germany’s economic ties with China and EU-wide hardening)
Chinese Ministry of Commerce (MOFCOM)
Lead Chinese agency countering EU trade actions (Denouncing EU EV and subsidy probes as protectionist and WTO-inconsistent)
Organizations Involved
EU
European Union
Supranational Union
Status: Using trade defence tools and economic security doctrine to confront China’s market distortions
The EU is a 27‑member political and economic union that holds exclusive competence over trade policy, including tariffs and trade defence investigations.
EU
European Commission
EU Executive Body
Status: Designing and enforcing trade, de-risking and industrial policies toward China
The European Commission proposes EU legislation, implements decisions, and manages the bloc’s trade defence instruments.
FR
French Presidency
National Government
Status: Driving the most hawkish major‑state stance on China within the EU
The French Presidency under Emmanuel Macron has been a leading advocate for tougher EU trade and industrial responses to China.
PE
People’s Republic of China
Nation State
Status: Facing growing EU trade defence actions while wielding export controls and vast manufacturing capacity
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
China’s trade surplus tops $1 trillion as EU tensions mount
Economic Data
China’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.
Macron threatens China with EU tariffs over soaring trade surplus
Public Statement
In 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.
German foreign minister heads to Beijing amid harder EU line
Diplomacy
German 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.
Macron’s state visit to China focuses on trade imbalance
Diplomacy
During 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.
EU unveils ReSourceEU to cut raw material dependence on China
Policy Announcement
The 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.
China issues first streamlined rare earth 'general licences'
De-escalation Move
China 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.
China tightens rare earth export controls
Export Control
In 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.
EU countries vote on making EV tariffs definitive
Policy Decision
EU 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.
EU imposes provisional tariffs on Chinese EVs
Legal Action
Following 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.
Von der Leyen warns Xi EU will "make full use" of trade defence tools
Diplomacy
After 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.
China condemns EU EV probe as 'blatantly protectionist'
Public Statement
China’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.
EU launches anti-subsidy probe into Chinese electric vehicles
Investigation
In 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
1
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.
2
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.
3
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.
4
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 Today
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)
2018–2025
What 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 Today
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)
2010–2014
What 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 Today
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.
