A broad shift in Germany and the EU is underway as a majority of German firms push for stronger EU trade measures against China, with concerns that China’s undervalued currency and industrial overcapacity are eroding European competitiveness.

The policy tilt responds to rising value-chain competition from China, a widening EU-China trade deficit, and domestic industrial pressures, including anticipated job cuts and cost-reduction drives in major sectors like automotive.

Germany’s chancellor signals that European companies face increasing pressure from China’s state-supported production and overcapacity, underscoring growing concern about fair competition.

The debates sit within broader EU discussions on de-risking and trade protection, as Brussels weighs new tools to shield European industry.

Analysts warn of a potential trade clash, though many experts say the EU would prefer to avoid full-scale conflict unless core economic interests compel it.

China’s foreign minister urged Europe to resist protectionism, arguing it would raise inflation and hinder green transition, while urging dialogue to resolve trade tensions.

EU-level talks focus on instruments to counter market floods from subsidized goods, including an overcapacity tool and faster anti-dumping procedures.

Germany’s evolving economic-security strategy could expand beyond the March framework to shore up critical supply chains and reduce vulnerabilities.

No blanket EU tariff is yet adopted; ongoing EU-BEIJING and internal talks will shape potential trade-defence measures affecting Germany–China ties.

Experts urge strengthening innovation, improving the investment climate, and accelerating industrial transformation while keeping open markets rather than relying on tariffs.

The report is part of coverage dated mid-September 2026, with ongoing Table.Media context on China-related trade issues.

Policy directions also consider using procurement tools, local-content incentives, and Buy European preferences to bolster Europe’s industrial competitiveness against Chinese influence.