Trade measures already introduced or under consideration by the European Union against China could affect as much as 27 percent of China's annual exports to European Union countries, according to analysts at Goldman Sachs Group Inc. Their findings were cited by Bloomberg.
Bloomberg reported that although relations between Beijing and Washington have stabilized since last year's tariff war, the standoff between China and Brussels, shorthand for the European Union's executive institutions, is intensifying ahead of a deadline set for resolving a record trade imbalance between the two sides. European Union leaders increasingly view the imbalance as a strategic problem, the outlet said.
Growing share of exports at risk
Last year, 15 percent of China's exports went to European Union countries. That share means the trade steps Brussels is weighing pose an increasingly serious political risk to Chinese trade abroad, according to Goldman Sachs, a global investment bank whose analysts track cross-border trade flows.
Among the measures under consideration are new tariffs on plug-in hybrid vehicles, the bank said. Brussels may also raise taxes on mass-market consumer goods made under weaker environmental standards than those required in the European Union. Any new vehicle duties would come on top of tariffs the European Union already imposes on Chinese-made electric vehicles, introduced in 2024 after a European Commission investigation into state subsidies.
EU's dependence on Chinese rare earths
The European Union depends on China for close to 90 percent of its rare earth elements, materials used in electronics, batteries and defense equipment. That reliance gives European officials a strong incentive to preserve access to the Chinese market and avoid the harshest possible measures, Bloomberg noted.
The European Union groups 27 member states and is one of China's largest trading partners, meaning any escalation between the two carries weight well beyond their bilateral trade.
Germany pushes for compensatory tariffs
The report comes after Germany's Mechanical Engineering Industry Association, known by its German acronym VDMA and representing German machinery and equipment makers, called on the German government to impose compensatory duties on Chinese industrial companies. The association said the step was needed to protect German industry from what it called unfair competition from China.
