A member of European Commission, left, prepares to exchange documents with Chinese delegation at a signing ceremony after the 5th China-EU High Level Economic and Trade dialogue at Diaoyutai State Guest House in Beijing, Sept. 28, 2015. AP-Yonhap
- Published Jul 21, 2026 1:29 PM KST
- Updated Jul 21, 2026 1:32 PM KST
Brussels is increasingly determined to ensure core industries survive if confrontation with Beijing proves unavoidable
As trade tensions with China reach boiling point, EU officials are ramping up engagement with Beijing in search of an off-ramp.
Quietly behind the scenes, though, Europe is preparing for a trade war. In Brussels, a steely determination has set in to ensure the bloc’s manufacturing heartlands are not deindustrialised by the “China Shock 2.0.”
With some industries already haemorrhaging jobs, the EU’s resilience-building and de-risking plans are now laced with deterrents as Brussels looks to acquire leverage and credible retaliatory tools that would allow it to respond if China uses trade coercively.
Some analysts say the sides are already in a trade war, others think the two sides are still preparing for the inevitable storm — and some say that a trade war should be avoided at all costs.
But a question that is increasingly being asked is: could Europe actually win?
Few in Brussels share the hubris of U.S. President Donald Trump, who in March 2018 said “trade wars are good, and easy to win.”
During a parliamentary hearing last week, the EU’s top trade enforcer, Denis Redonnet, said the purpose of engaging with Beijing was “to avoid sleepwalking at two levels.”
“One, not to sleepwalk into excessive dependencies any more but two, not sleepwalking into an unnecessary trade war with China. It’s going to be a combination of … navigating between these two extremes,” Redonnet said.
Beijing has spent the past eight years building an arsenal of weapons that one senior EU official described recently as “formidable.”
Yet one view is that Europe, if it wishes to hold on to its industry, has little choice but to get into the trenches.
“Something we really try to emphasise in the book is that Europe’s already in the trade war, and I think that’s what the public doesn’t understand,” said Chad Bown, from the Peterson Institute for International Economics and co-author with the journalist Soumaya Keynes of How to Win a Trade War, a book that will accompany many EU officials to the beach this summer.
He said it was not simply a question of “do we do tariffs or not?” adding: “China is already doing all of these things and Europe has to respond. So then the question is, what’s the combination of policies?”
Plans are accelerating to exclude Chinese companies from procurement markets, to force investors in the electric vehicle supply chain to transfer technology and to compel European companies to diversify their supplier base to avoid over-concentration on Beijing.
Narrow product-based investigations into alleged Chinese dumping and subsidies are also gathering pace, and there are moves afoot to broaden those to subsectors using “safeguard” probes.
These would allow for emergency tariffs and quotas to be imposed on product groups, but would also target the whole world, rather than just Beijing.
For months, officials have been searching for chokepoints where China is dependent on Europe in an effort to “assess where we have leverage … we need to start trying to place ourselves in a situation where we can react as well,” according to a second senior official.
Meanwhile, Brussels is preparing for the expected Chinese blowback. Work is under way to establish a solidarity mechanism for companies caught in the crossfire by Chinese retaliation — something EU officials are certain will come.
The bloc has also been expanding its web of trading partners as it looks for alternativentrols — ranging from rare earths and graphite to gallium and germanium — but progress has been slow on stockpiling and building an indigenous supply chain in Europe
Whether that is enough is debatable. But before assessing Europe’s chances, there is a more fundamental question about what victory would actually look like.
Nadine Godehardt, a specialist in China and geopolitics at the German Institute for International and Security Affairs, said “to some extent, we are in a trade war because everyone is positioning … both sides are more or less preparing.”
This combination of photos created on June 26 shows files pictures of China’s Minister of Commerce Wang Wentao, left, attending a press conference of the Central Committee of the Communist Party of China (CPC) in Beijing, Oct. 24, 2025 and European Union Trade Commissioner Maros Sefcovic speaking before signing a memorandum of understanding for a strategic partnership on critical minerals at the State Department in Washington, DC, April 24. AFP-Yonhap
For Godehardt, victory would not be defeating China but surviving a decade of strategic competition while preserving enough of Europe’s industrial base, and ultimately its democratic model, to remain a
“The trade war is really not about winning in the sense that you can really gain something out of it. It’s a very long-term situation — more like the Hundred Years’ War … there’s lots of friction, and you have to be prepared for retaliation,” she said.
Virtually nobody believes the EU can win in an escalatory tit-for-tat conflict with Beijing. When Trump ramped up U.S. tariffs on Chinese goods to 150 percent last year, China forced an embarrassing climbdown by putting export controls on rare earth minerals and magnets. For Europe, this was a cautionary tale.
“Realistically, will there be sort of a big bang type of assault? I’m not sure. The threat is so intense from China now, and they have made this so abundantly clear,” said Tobias Gehrke, a specialist in geoeconomics at the European Council on Foreign Relations (ECFR), pointing to industrial supply chain security and outbound investment rules adopted by Beijing in recent months.
Instead, Europe’s best chance of survival may be through the plethora of smaller actions — described in an ECFR paper as a “distributed swarm” — each of which would bolster resilience or reduce dependence at a lower risk of a response such as cutting off rare earth supplies completely.
“This works like a military swarm … it is far harder for Beijing to swat away 50 small, dispersed measures at once than one large and threatening one,” wrote the think tank’s Asia chief Andrew Small.
Many of the elements of this “swarm” — from trade cases and supply chain mapping to diversification and leveraging the giant EU market — are already happening, with varying degrees of speed and success. There is a feeling, in Brussels at least, that Europe is more likely to succeed with this strategy.
“We don’t have this one tool that rules them all, but should unleash across the board all the measures, whether it’s cybersecurity, strict market access, public procurement or foreign subsidy regulation … all of them taken together can amount to something meaningful,” Gehrke said.
But the other big question is whether Europe has the stomach for a fight.
It is indisputable that the European Commission is getting its ducks in a row, but also hard to argue that the 27 member states have the requisite pain threshold.
Divisions among capitals have proven to be the EU’s Achilles’ heel in skirmishes against the U.S. and China in recent years and as trade becomes increasingly securitised, national governments have more of a say than before.
“The competence of trade policy is moving to the member states … they are famously divided when it comes to how to deal with China,” said John Clarke, a former lead EU trade negotiator with a long history of dealing with Beijing.
“China knows that. They exploit it. They divide and rule.”
For this reason, perhaps, the EU’s most potent trade weapon, its anti-coercion instrument, has lain unused despite several high-profile attempts at economic bullying from both superpowers.
“I don’t think there’ll be a consensus inside the EU to have a direct fight with China. China knows Europe is a paper tiger … it won’t win a trade war,” Clarke said.
If Clarke is right, Europe is unlikely to emerge from a prolonged trade war with China as an outright victor — but it is unclear whether that should be the goal.
As Bown and Keynes argue in their book “a winner might be the one who is best able to preserve their economic model,” or simply “the team that loses less than a rival.”
Read the article at SCMP.
