French President Emmanuel Macron’s warning that the European Union may impose tariffs on Chinese industrial goods marks a clear hardening of Europe’s stance towards Beijing and exposes the limits of his strategy of balancing between Washington and China.
Speaking at the end of a visit to China, Macron described the current situation as “a matter of life and death for European industry”, arguing that Europe has been caught “between two fires”: Chinese overcapacity and state-backed exports on one side, and US protectionism on the other. He warned that if Beijing did not alter its course, Europe would be compelled to adopt measures “similar to the American ones”.
Behind the rhetoric lies a worsening economic picture. The EU’s goods trade deficit with China has risen sharply in recent years, with France’s own deficit roughly doubling over the past decade. European policymakers fear that subsidised Chinese products – notably in sectors such as electric vehicles, batteries and solar panels – are eroding Europe’s industrial base and innovation model, traditionally anchored in high-value manufacturing.
Macron’s comments came only days after talks with Xi Jinping in Beijing, during which he sought both economic concessions and a shift in China’s approach to Russia’s war against Ukraine. There has been no public sign of movement on either front. Beijing continues to pursue an export-driven model backed by extensive state support, while maintaining close political and economic ties with Moscow. For many in Europe, this combination directly affects both the continent’s prosperity and its security.
China’s economic strategy is rooted in what amounts to state-managed capitalism. The Communist Party retains decisive influence over major firms and directs substantial subsidies towards sectors selected to dominate global markets. This approach has allowed Chinese manufacturers to expand aggressively abroad, while maintaining tight control at home. European officials argue that this creates structural distortions: foreign competitors are squeezed not only by price but also by the scale and speed of Chinese state support.
At the same time, Beijing has treated the war in Ukraine as a broader strategic issue. By supporting Russia economically and diplomatically, while avoiding direct participation in the conflict, China benefits from prolonged pressure on both the EU and the United States. A weakened, divided Europe could allow Russia – increasingly dependent on China – to act as a regional hegemon in Europe under a broader Chinese geopolitical umbrella. In this reading, the conflict becomes an instrument for reshaping the balance of power on the European continent.
Macron had hoped that Europe’s relative openness to Chinese trade and investment, compared with the United States, might translate into political leverage. His broader project of “strategic autonomy” envisaged the EU as an actor able to engage with Beijing on its own terms, and potentially to play a distinct role in efforts to end the war in Ukraine. His repeated visits to China were part of an attempt to position France, and by extension Europe, as a key interlocutor for Xi on both security and economic questions.
So far, that calculation has yielded little. Beijing shows no eagerness to separate Europe from the United States on core strategic issues. China continues to treat both as long-term competitors, while deepening its relationship with Moscow. In parallel, Chinese influence campaigns and targeted economic engagement with far-right and far-left forces in Europe have raised concern in European capitals that such tactics could be used within the EU to steer political outcomes in ways that favour Russian and Chinese interests.
Across the Atlantic, the United States has pursued its own fluctuating economic confrontation with China. President Donald Trump’s administration has combined waves of tariffs with periodic truces, most recently a deal involving reduced US tariffs in exchange for Chinese commitments on rare earth exports, fentanyl-related controls and large purchases of American soybeans. These arrangements have been strongly influenced by domestic political pressures, particularly from agricultural and industrial constituencies ahead of key electoral contests.
For Europe, such US–China bargains can have unintended side-effects. When Washington strikes temporary deals that secure supplies and market access for American producers, Chinese exporters may redirect excess capacity towards Europe, intensifying competitive pressure on EU industries. At the same time, Europe lacks the single, federal trade and industrial policy instruments available to Washington, making coordinated responses harder to implement and slower to agree.
The European Commission is now examining more assertive measures of its own, including content requirements that could oblige “critical goods” such as cars and clean-tech equipment to be largely “made in Europe” in order to benefit from public support. This industrial turn, championed by Paris, would narrow the space for Chinese suppliers in key value chains, but it risks clashes with World Trade Organisation rules and internal divisions within the EU.
Macron’s tariff warning therefore reflects more than a bilateral dispute with Beijing. It signals a broader shift in Europe’s position: from seeking a special role as a mediator and economic partner to acknowledging that China’s current course is incompatible with the survival of significant parts of Europe’s industrial base. Whether the EU can translate that recognition into coherent, collective action – and whether it can do so while maintaining a functional relationship with both Washington and Beijing – will help determine not only Europe’s economic future, but also its capacity to shape outcomes in the war on its eastern flank.
