Brussels should resist the siren song of protectionism

The European Union is rightly concerned about its widening trade deficit with China. But the tools Brussels is preparing risk making the imbalance worse, not better. Threats of “harsher measures” and export restraints may sound forceful, yet they start the conversation in the wrong place. If Europe wants a smaller deficit, it should first ask why European exports are underperforming—and what policy mix would strengthen the continent’s competitiveness.

Competitiveness, not coercion

China’s manufacturing prowess has been built over years through heavy investment in research and development, intense domestic competition, vast economies of scale, and a dense industrial ecosystem that can sprint from prototype to mass production. Europe has deep capabilities too—world-class research, advanced engineering, and sophisticated supply chains—but too many of its industries are ceding ground in precisely the technologies and manufacturing capacities that will drive the next wave of growth.

Trade barriers will not fix that. They will, however, raise costs for European consumers and for manufacturers that rely on Chinese inputs. With eurozone inflation still above the European Central Bank’s target, curbing access to relatively competitive goods is hardly cost-free. Protectionism can shelter a producer while taxing everyone else.

Why the carrot-and-stick approach misfires

Pairing dialogue with threats might once have swayed smaller trading partners, but China is now a vast technological and industrial economy with a large domestic market and diversified trade. It is unrealistic to expect Beijing to accept a bargain in which “talks” are the carrot and “coercion” the stick. Such posturing wastes leverage and attention that would be better deployed on structural reforms that lift Europe’s own performance.

Don’t outsource Europe’s China policy

Recent international meetings highlighted sharp disagreements over how to interpret China’s trade surplus and industrial capacity. Europe knows this playbook. The United States has repeatedly pointed to Europe’s trade surplus as justification for tariffs—measures EU governments see as arbitrary. It would be self-defeating for Brussels to reject that logic when applied to Europe, only to reproduce it against China. Consistency matters for credibility, for alliances, and for the rules-based order Europe says it wants to uphold.

Avoid selective standards dressed up as virtue

France’s new measures against ultra-fast-fashion platforms exemplify the risks. Escalating charges on specific low-cost imports while sparing many established domestic and traditional fast-fashion retailers blurs the line between environmental stewardship and targeted protection. If sustainability is the goal, standards should be applied consistently and transparently to all players. Double standards invite precisely the legal and diplomatic challenges Europe seeks to avoid.

The better path: sell more, don’t just buy less

Europe can make trade more balanced by enlarging its capacity to sell. Three priorities stand out:

• Recalibrate export controls on high-technology products—especially advanced machinery and equipment—where European firms are competitive and where sales can be responsibly managed.
• Secure wider market access in China for European agriculture, automotive, pharmaceuticals, and medical devices, building on demonstrable strengths.
• Attack domestic regulatory and investment bottlenecks that hold back productivity, scale-up capital, and the commercialization of European innovation.

The trade and investment consultations mechanism launched by China and the EU in June offers a practical channel. Brussels should use it to negotiate seriously on market access, subsidies, technical standards, industrial policy, and the concrete obstacles European exporters face on the ground. Progress here would do more to narrow the deficit than any tariff threat.

Keep Europe’s interests front and center

Europe does not have to choose between Washington and Beijing, nor should it mimic U.S. tactics in hopes of gaining leverage. The union’s core interest is simpler: a more competitive European economy, open markets where they serve European goals, and trade rules enforced consistently for all partners. That means resisting reactive policies that conflate security with blanket protectionism, while still addressing genuine security concerns with targeted, proportionate tools.

A deficit shaped by policy and markets

The EU’s deficit with China reflects, in part, Europe’s own high-tech export restrictions and the realities of comparative advantage. It did not appear overnight and will not be solved by suppressing Chinese firms. Durable improvement requires policies that boost European innovation, manufacturing scale, and market access—paired with a clear-eyed commitment to fair, predictable rules.

Resist the easy answers

Europe once understood that protectionism is a tax on prosperity. Relabeling it as virtue does not change its costs. Brussels should focus on the hard work of competitiveness—investing in technology, scaling production, reducing red tape, and negotiating meaningful access—rather than the short-term optics of punitive trade measures. That is the only credible path to a stronger European economy and a healthier, more balanced relationship with China.