Europe sees Chinese subsidies, China sees European weakness
Illustration: Rose Wong
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T hucydides thought rising powers tend to cause conflict. Had he been an economist looking at the explosion of Chinese exports to Europe, he might have expected a trade war. So do many analysts these days. The question is no longer whether Europe will pull up some drawbridges, but how many and how fast, and how it will deal with the consequences.
The stakes are clear. Bankruptcies in the European Union have risen to levels last seen in 2015. Germany lost 143,000 jobs in industry in 2025. In most of Europe growth is sluggish and industrial production declining. In France and Germany hard-right parties lead the polls. At a summit on June 18th EU leaders will discuss how to cope with the Chinese challenge, in an increasingly dire global economy.
Is China really behind Europe’s economic problems? The EU ’s trade deficit in goods with China was about €1bn ($1.16bn) a day in 2025, roughly double the figure before the pandemic. Germany especially has seen a constant rise in imports from China and a steep decline in exports going there. Some see foul play. The OECD, a club of mostly rich countries, found Chinese firms got three to eight times more subsidies between 2005 and 2024 than competitors in OECD countries. Some would fail without them: 32% of industrial firms in China lose money.
Those sceptical of blaming China argue that Europe’s high energy costs, slow bureaucracies and failure to innovate or integrate are the true culprits. Worse, hampering imports of Chinese materials and parts would harm Europe’s downstream businesses. That could hurt competitiveness more than it helps. The list of protected “strategic” sectors is already long.
France, which is hosting a G7 summit on June 15th, is emphasising macroeconomic imbalances. China’s currency is undervalued by between 15% and 30%, making its exports cheaper. But the deeper cause is its surplus of savings over investment, the flip side of any export surplus, which protectionism can do little about, except to force the exports elsewhere. Awkwardly, Europeans know this model well. Germany perfected it in the 2010s, and its current-accountsurplus is still 4.5% of GDP, in the same ballpark as China’s.
Even so, the EU has hit back. On April 21st it let Lisbon go ahead with a light-rail project only after a Chinese-owned contractor that it said received subsidies was replaced by a Polish one. An investigation into subsidies on electric vehicles led to tariffs in 2024. Tariffs on steel were adopted on June 8th. Last year the bloc barred public procurement of medical devices from China, in retaliation for Chinese exclusion of European ones. The list goes on.
Map: The Economist
For many, that is not enough. A consensus is forming that the threat outweighs concerns over retaliation. “Confronting China is going to be expensive either way, but the longer we wait, the more expensive it will get,” says a German industry representative. China’s economic chokeholds, such as its dominance of rare-earths refining, have helped focus minds.
The EU ’s first option is to use existing trade-defence tools more forcefully. Its anti-subsidy and anti-dumping instruments involve careful case-by-case investigations, which can be challenged in court. An official compares them to “taking a little spoon to get water out of the boat”. The EU is exploring applying them to broader groups of products, or even shifting the burden of proof: if macro-data suggest excessive subsidies, firms would need to show they have received none.
A second possibility is to develop stronger barriers against import surges. EU officials have long talked of an “overcapacity instrument”, to be used when countries are producing more of a given product than can be economically justified. But the concept is hard to pin down and may be unworkable. The bloc could simply use safeguards more often, such as those it has applied to steel. But such tariffs are supposed to apply to all countries and are temporary. Sander Tordoir and Brad Setser, in an analysis for the Centre for European Reform, a think-tank, propose a European version of America’s Section 301 tool. This allows sweeping tariffs to counter practices harming American trade.
A third option is to complement defensive trade measures with industrial policy. “That combination of trade measures with investment and industrial policy is a significant intellectual shift,” argues Shahin Vallée of the German Council on Foreign Relations. The EU recently proposed making some public procurement conditional on local content. Its tech-sovereignty package includes a boost to Europe’s semiconductor supply chain. National governments are adding their own subsidies to the mix.
The great unknown is China’s response. It might hit back with export bans that would deny European industry crucial materials or parts. “China is overconfident, but that makes them a difficult negotiation partner,” argues a longtime observer. It has little patience for European complaints about subsidies or overcapacity, and sees them as a sign of European weakness. On June 11th China cancelled two high-level meetings with the EU. China’s trade spat with America will have emboldened its leaders. Still, it will probably adopt strong but tailored responses to Europe, as it will want to avoid a full-scale trade war.
Europe’s consensus is frail. Measures beyond broadening existing tools and “Buy European” policies are unlikely. Few believe Europe is willing to endure Chinese retaliation, or activate its powerful anti-coercion instrument in response. Germany and Spain will play crucial roles. Germany, which only recently converted to a tougher stance on China, will fear that retaliation could bring parts of its industry to a standstill. Spain, for its part, is taking a realist stance. It argues that the new global order must accommodate a powerful China, and that measures should be targeted only at demonstrably unfair practices.
“The priority should be to reduce dependencies as quickly as possible, otherwise threats to deploy trade-defence instruments are toothless,” says a German official. Maros Sefcovic, the EU ’s trade czar, has proposed forcing firms to diversify their suppliers (ie, beyond China). The Chinese will push back hard, says Max Zenglein of the Conference Board, a global business association. China’s recent decrees on supply chains and other countries’ extraterritorial measures make clear that it wants to keep the world dependent. On trade policy, the EU and China are heading for a mighty collision. ■
논증 분석
유형: diagnosis
핵심 주장
EU와 China 간의 무역 전쟁은 사실상 불가피하며, EU는 기존 무역방어 수단 강화, 수입급증 차단 장벽 구축, 산업정책 결합이라는 세 가지 대응 경로를 모색하고 있으나 내부 분열과 중국의 보복 위협으로 인해 강력한 조치를 취할 역량이 제한적이다.
논리구조
- 전제: EU의 대China 상품 무역적자는 2025년 하루 약 10억 유로로 팬데믹 이전의 두 배에 달하며, 유럽 전역의 파산 증가·독일 제조업 일자리 14만3천 개 소멸·성장 둔화 등 심각한 경제적 타격이 발생하고 있다.
- 진단: OECD 조사에 따르면 China 기업은 2005
2024년 사이 OECD 경쟁사 대비 38배 많은 보조금을 받았으며, 중국 산업 기업의 32%는 보조금 없이는 생존 불가능하다. 이는 유럽 산업 위기의 핵심 원인으로 지목된다. - 반론: 회의론자들은 유럽의 높은 에너지 비용, 느린 관료주의, 혁신·통합 실패가 진짜 원인이며, 중국산 원자재·부품 수입을 막으면 오히려 유럽 하류 산업의 경쟁력을 해칠 수 있다고 주장한다.
- 반론: France가 강조하는 거시경제적 불균형(중국 위안화 15~30% 저평가) 문제도 있으나, 보호주의로는 중국의 저축 과잉 구조를 해결하기 어렵다. 더욱이 Germany 역시 GDP 대비 4.5% 경상수지 흑자를 유지하며 유사한 모델을 실행해 왔다는 점에서 유럽의 입장이 모순적이다.
- 논거: EU는 이미 전기차 관세(2024), 철강 관세(2025년 6월 8일), 의료기기 공공조달 배제, 리스본 경전철 사업에서 중국계 계약업체 교체 등 일련의 대응 조치를 취해왔다.
- 처방: 첫 번째 대응 경로: 기존 반보조금·반덤핑 수단을 더욱 강력하게 활용하되, 적용 범위를 개별 케이스에서 제품군 전체로 확대하거나 입증 책임을 전환하는 방안을 검토 중이다.
- 처방: 두 번째 대응 경로: 과잉생산 대응 수단(overcapacity instrument) 도입, 세이프가드 확대 적용, 미국의 Section 301에 상응하는 유럽판 광범위 관세 도구(Centre for European Reform 제안) 개발을 추진한다.
- 처방: 세 번째 대응 경로: 무역방어 조치와 산업정책을 결합하여 공공조달 로컬콘텐츠 조건 부과, 반도체 공급망 강화 등 기술주권 패키지를 추진하는 지적 패러다임 전환이 진행 중이다(Shahin Vallée, German Council on Foreign Relations).
- 진단: China는 유럽의 불만을 유럽의 나약함으로 인식하고 있으며, 2026년 6월 11일 EU와의 고위급 회의 두 건을 취소하는 등 강경한 태도를 유지한다. 미·중 무역 분쟁이 중국 지도부를 더욱 대담하게 만들었으나, 전면전은 피하려 할 것으로 분석된다.
- 반론: EU 내부 합의는 취약하다. Germany는 보복으로 인한 자국 산업 마비를 우려하고, Spain은 현실주의적 관점에서 중국을 새로운 세계질서의 강대국으로 인정하며 명백히 불공정한 관행에만 타깃형 조치를 취해야 한다고 주장한다.
결론
EU와 China는 무역 정책에서 강력한 충돌로 치닫고 있으나, 유럽이 중국 보복을 감내할 의지와 내부 단결이 부족한 상황에서 공급망 의존도를 신속히 줄이지 않는 한 무역방어 수단은 공허한 위협에 그칠 것이다.
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