Germany is expected to draft proposals for a tougher European Union trade policy toward China by October, Chancellor Friedrich Merz said on Wednesday, adding momentum to calls for the bloc to protect European manufacturers from a growing input of lower-priced Chinese goods.
Chancellor Merz spoke after a cabinet retreat at Neuhardenberg Castle, where ministers were asked to agree on a German position before EU leaders meet in Brussels in mid-October. His announcement followed a call from Sebastian Lechner, the Christian Democratic Union chairman in Lower Saxony, to possibly extend EU tariffs to Chinese hybrid cars. The issue is especially meaningful to the state since it is home to Volkswagen’s Wolfsburg headquarters.
These concerns come after recent economic tensions between Brussels and Beijing. China recently criticized the EU’s probe into JD.com’s planned €2.2 billion takeover of German electronics retailer Ceconomy, accusing Brussels of abusing its foreign subsidies powers and warning of countermeasures.
That followed China’s export controls on 14 European companies and renewed concerns over Chinese investment near sensitive infrastructure, including SAIC’s proposed electric vehicle plant near Spain’s naval hub in Ferrol.
The debate is now placing European Commission President Ursula von der Leyen’s China policy under closer scrutiny.
President Von der Leyen has argued Europe must reduce risky dependencies without cutting economic ties with Beijing. But critics suggest that some Commission decisions still leave openings for Chinese products and investment to gain ground inside the single market.
The apparent “contradiction” might be seen in the car industry. Chinese battery-electric vehicles already face EU countervailing duties of between 7.8% and 35.3%, designed to offset the price advantage created by Chinese state subsidies. But plug-in hybrids remain outside that regime, even as they become a more important route into the European market. Any new duties would require a separate EU investigation.
At the same time, a path seems to have emerged for some exporters to avoid those charges. In February, Volkswagen’s China-based joint venture was exempted from duties on one Cupra model after the company accepted a minimum sale price, import limits, and European investment commitments. Brussels argued the deal would not harm EU industry, but critics say these arrangements send “mixed signals” to manufacturers already under pressure from Chinese competition.
The concern reaches beyond cars. Europe’s move toward electric power has increased demand for batteries and energy-storage technology, markets in which China dominates. EU energy ministers have warned that this dependence could leave the bloc exposed to supply disruptions and weaken its ability to make independent economic decisions.
Consumer products present another challenge. EU customs data show that 5.9 billion low-value items entered the bloc in 2025, more than 90% from China. It could be argued that the volume overwhelms inspections, allowing unsafe or mislabeled goods to pass through.
Nicotine and vape products show how trade enforcement can, possibly, become a public-health issue. OLAF chief Petr Klement has warned that Europe is being “flooded” with cheap Asian-made vapes that evade taxes and safety checks, sometimes through air freight or shipments falsely declared as other goods. A recent operation seized more than 94 million vape products, of which about 90% reportedly breached health, safety, or national rules, with excessive nicotine, banned flavors, cannabis, and labelling failures.
This all comes as regulated European nicotine companies complain about facing tighter restrictions, political scrutiny, and proposals for higher taxes on e-cigarette liquids. Industry representatives say potentially non-compliant Chinese vapes entering through weak logistics channels undercut European producers that follow EU rules, pay taxes, and invest in local manufacturing.
Supporters of tougher EU action point to the United States as a model for the EU, which has relied more heavily on tariffs on Chinese goods, tighter customs enforcement, and investment restrictions in sensitive technologies.
Chancellor Merz is not thought to have endorsed a specific tariff plan, and Germany remains connected to the Chinese market. Its exports to China fell by more than 12% in the first half of 2026 as the bilateral deficit widened. Berlin’s position in October will, it could be argued, help show whether the EU continues with targeted protections and negotiation or moves toward a broader effort to protect European production, strengthen border checks, and reduce dependence on China.
This site approached the European Commission for a comment and a spokesman said, “The EU-China trade relationship is of great importance for both sides.
“From the EU perspective, there is an opportunity to strengthen the relationship through engagement and dialogue, with a view to making it more reciprocal, balanced, fair. This will allow for both sides to reap a wider range of benefits.
“The need to rebalance this relationship has been addressed consistently and at the highest political levels, including at the European Council in June, which strongly supported a European response based on unity among Member States and dialogue with China.”
The spokesman went on, “The Commission is now taking this forward.
“On 29th June, Commissioner Maros Šefčovič and Minister Wang Wentao held the first meeting of the EU-China Trade and Investment Consultations (TIC) in Brussels, where both sides noted the importance of addressing the challenges affecting the bilateral trade relationship and agreed to seek practical solutions. Contacts at technical level continue, with a ministerial level meeting taking place in Autumn 2026.
“Our approach is balanced, with a strong focus on results. We will engage with China where engagement is possible. We will push for solutions where dialogue can deliver. But if dialogue fails, we will act,” continued the commission spokesman.
The spokesman added, “As the President has made clear, the EU stands ready to act decisively and we will defend our interests with determination.
“We will use our full range of autonomous trade, economic security and defence tools at our disposal to protect our European industry and ensure fair competition.
“For the moment, as Commissioner Šefčovič said back in June, a clear mandate to deliver tangible results by autumn has been set. And we look forward to taking stock then,” concluded the spokesman.
