Five major European Union member states — Spain, Italy, the Netherlands, France, and Lithuania — have jointly called on the bloc to adopt significantly stronger measures against what they describe as 'systemic and structural industrial overcapacity', a phrase widely understood as referring to China. The move, backed by an unpublished policy paper, comes days before a major China-focused policy debate at the European Commission in Brussels.

What the Paper Proposes

The document, first reported by the Financial Times and subsequently seen by the South China Morning Post, argues that the EU must shift away from slow, product-by-product anti-dumping investigations and instead deploy sector-wide safeguard measures far more aggressively. These mechanisms allow the bloc to impose tariffs or quotas when import surges are found to be damaging domestic industry. Historically, such tools have been used sparingly — most notably against Chinese steel and ferroalloys.

The paper also floats the creation of a new 'resilience tool' that would be automatically activated whenever European supply sources become concentrated beyond a defined threshold, providing a structural backstop against strategic dependencies.

The Jobs Toll Behind the Push

The five-nation paper argues that the combined pressure of US tariffs and China's 'unfair trade practices' has directly cost European industry an estimated 1 million jobs between 2019 and 2025. A separate analysis published last week by the Centre for European Reform added further weight to this concern, estimating that more than 400,000 German jobs linked to exports to China may already have been displaced by Chinese domestic production.

Macron's Call for a European 'Section 301'

French President Emmanuel Macron on Friday called for the creation of a European equivalent of the US 'Section 301' mechanism — a tariff instrument that successive US administrations, most recently under President Donald Trump, have deployed extensively against Chinese goods. Macron's intervention, combined with the backing of Italy, the Netherlands, and Spain, signals that pressure for a harder EU line on China is no longer a fringe position but one with broad support among the bloc's largest economies.

Brussels Debate and What Comes Next

The European Commission is preparing for a formal China policy orientation debate on Friday, intended to chart a new strategic course in response to mounting complaints from governments and industries about competitive pressure from Chinese imports. The timing of the five-nation paper — circulated privately just ahead of that debate — appears designed to shape the Commission's direction. Notably, this is the most coordinated multi-state push on China trade policy the EU has seen since the electric vehicle tariff dispute of 2024.

Whether the Commission moves toward the more muscular toolkit the paper envisions will depend on how it balances the concerns of export-dependent member states against those most exposed to Chinese competition.