China Warns EU of Retaliation Over ‘Made in Europe’ Industrial Plan

The Chinese government has issued a sharp warning to the European Union, threatening “countermeasures” if Brussels moves forward with a controversial industrial plan designed to boost domestic manufacturing and reduce reliance on foreign supply chains. The escalating trade tensions come as Europe seeks to reverse decades of deindustrialization and compete more aggressively with China in key sectors.

In a statement released on Monday, China’s Ministry of Commerce expressed “grave concerns” about the EU’s proposed “industrial acceleration” legislation, which would require companies in strategic sectors to source a significant portion of critical components from European suppliers when receiving public funding. The plan, unveiled by the European Commission on March 4, targets industries ranging from automotive manufacturing to clean energy technologies, including solar panels, batteries and heat pumps.

“If the EU ignores China’s suggestions and insists on adopting this discriminatory text, thereby harming the interests of Chinese companies, we will have no choice but to take countermeasures,” the ministry warned. The statement added that Beijing had formally submitted its objections to the European Commission on April 24 and would “closely monitor the legislative process” while remaining open to dialogue.

The dispute underscores the growing friction between the world’s two largest trading blocs as Europe attempts to rebuild its industrial base. The EU’s plan aims to increase the share of industrial output in its GDP from 14% to 20% by 2035, a goal that French EU Commissioner Stéphane Séjourné described as essential for economic sovereignty. “Our objective is clear: to bring industry back to 20% of European GDP by 2035,” Séjourné said during the plan’s presentation last month.

China’s reaction reflects broader concerns about losing market access in Europe, where its exports—particularly in electric vehicles, renewable energy components, and industrial machinery—have faced increasing scrutiny. The EU’s trade deficit with China has tripled over the past five years, a trend that policymakers in Brussels have cited as justification for the new industrial strategy.

While the proposed legislation still requires approval from EU member states and the European Parliament, Beijing’s warning signals potential trade disruptions if the plan is enacted without concessions. Analysts note that China has previously imposed retaliatory tariffs or import restrictions in response to perceived protectionist measures, particularly in sectors where it holds significant global market share.

The standoff comes at a delicate time for European manufacturers, many of which have struggled with rising energy costs and supply chain vulnerabilities exposed by the COVID-19 pandemic and geopolitical conflicts. The “Made in Europe” initiative is part of a broader push to secure critical supply chains, particularly in green technologies, where China currently dominates production.

As the legislative process unfolds, both sides face pressure to avoid a full-blown trade war that could disrupt global supply chains and economic recovery. The EU has emphasized that its plan is not intended to exclude foreign companies but to ensure that public subsidies support domestic production. However, Beijing’s response suggests that any move perceived as protectionist could trigger a swift reaction.

For now, the ball remains in Europe’s court. The coming weeks will determine whether the EU can navigate China’s objections while advancing its industrial ambitions—or whether the dispute will escalate into another chapter of transcontinental trade tensions.