Sino-EU Relations: Is a Storm Brewing?

Moreover, a new round of anti-dumping and countervailing duty (AD/CVD) investigations will be launched against China’s chemical, plastic, new materials, and electromechanical industries—kicking off a year-long cycle of multi-category trade remedy probes. If you’ve been closely following trade developments, you’ll know that although Trump has threatened to impose an additional 12.5% tariff on Chinese goods citing ‘forced labor,’ this is merely a repackaging of the old tariffs—replacing those previously struck down by U.S. courts. The EU, by contrast, represents the *real* new challenge. So why has the EU grown increasingly tough—and begun baring its claws toward China? The fundamental reason lies in China’s industrial upgrading and transformation: we have now moved into the mid-to-high end of global industrial chains, making the EU feel its ‘slice of the pie’ is being encroached upon—more and more acutely. Since World War II, the global industrial order has followed a clear pattern: the U.S. leads in innovation—pioneering breakthroughs from zero to one—and reaps outsized profits; the EU and Japan/South Korea follow, focusing on mid-to-high-end manufacturing. China entered this system in the late 1970s, initially handling low-end contract manufacturing. Until 2010, all parties coexisted relatively peacefully. But the Chinese people are exceptionally hardworking and intelligent. Starting from ‘processing trade’ models (i.e., ‘three-comes-and-one-compensation’), over the past decade-plus, China has aggressively advanced across the entire mid-to-high-end value chain—now competing head-on with the EU and Japan/South Korea. Japan and South Korea are comparatively small and geographically close to China; in many areas, they rely heavily on China and thus hesitate to launch full-blown trade wars. The EU is different: with 27 member states and a population of 450 million, its GDP in USD terms in 2025 is projected to slightly exceed China’s. From the EU’s perspective, automobiles, new energy, telecommunications, medical devices, and critical raw materials are all its core domains—yet Chinese competition has left it largely on the defensive. Naturally, this breeds resentment. A set of data underscores this shift: In 2018, China’s trade surplus with the EU was only half that with the U.S.; by 2025, China’s surplus with the EU had historically surpassed that with the U.S.

Tariffs as high as 419%? Ten trade cases in six months! Wanhua Chemical and Hengyi urgently expand overseas—has China’s chemical industry been cornered?

Recently, the European Commission held a special Brussels-based meeting on EU-China economic and trade relations, focusing on manufacturing dependence on China and discussing concerns that foreign subsidies distort the EU’s domestic market and pose geopolitical security risks. Following the meeting, the Commission publicly declared that EU-China economic ties are ‘no longer sustainable’ and pledged to deliver a ‘stronger, more coherent response.’ If approved, the proposed legislation could introduce a series of restrictions targeting China’s chemical, plastic, and new materials industries—marking the EU’s formal turn toward systemic protectionism in its trade policy toward China. Trade tensions are escalating sharply! The EU’s one-two punch targets China’s chemical industry The central agenda of this meeting was the establishment of so-called ‘resilience tools’ or ‘overcapacity tools,’ designed to bypass the WTO’s lengthy anti-dumping and countervailing duty investigation procedures—and instead impose pre-set import quotas on Chinese products. Once imports exceed these quotas, steep tariffs would be automatically triggered. Simultaneously, the EU is advancing new supply-chain regulations, proposing to mandate that firms source critical components from no fewer than three suppliers—with single-source procurement capped at 30–40%. This rule-based approach systematically shrinks market access for Chinese chemical products. Source: China-EU News Agency More notably, this containment effort is not a solo EU initiative. The U.S., Australia, South Korea, Brazil, and others have recently launched密集 trade remedy investigations against Chinese chemical products—seeking duties exceeding 400% in some cases. China’s chemical and plastics sector is now facing an unprecedented, globally coordinated, systemic blockade—a full-scale global trade contest over industrial chains is rapidly intensifying. The chemical and plastics value chain is ground zero The EU’s current wave of protectionist measures is heavily concentrated on chemicals, plastics, and upstream raw materials—both in case volume and tariff levels, setting historical records. According to publicly available information, the EU initiated over ten trade remedy cases against Chinese chemical products in the first half of 2026 alone—accounting for roughly half of all newly launched cases. Adipic Acid Anti-Dumping Case: On May 5, the EU issued its final anti-dumping ruling on Chinese adipic acid, imposing duties ranging from 29.1% to 42.3%. Adipic acid is a key raw material for producing nylon 66, widely used in automotive, electronics, and packaging sectors. Notably, over 80% of the EU’s adipic acid supply comes from China, while its domestic industry is extremely small—making the protective intent of this anti-dumping action unmistakable, though the ultimate cost burden will fall on European downstream users. Alkyl Phosphonate Anti-Dumping Case: On May 13, the EU issued its preliminary anti-dumping ruling on Chinese alkyl phosphonic acid and its sodium salts, imposing provisional duties of 182.9% to 219.4%—effectively a near-total ban. Alkyl phosphonates serve as crucial water treatment agents and flame retardant precursors; such exorbitant duties will directly sever China’s export channel to the EU. 1,4-Butanediol (BDO) Anti-Dumping Case: In early February, the EU issued its preliminary anti-dumping ruling on Chinese BDO, levying duties of 105.6% to 113.7%. BDO is a core raw material for producing biodegradable plastic PBAT, polyurethane, and PTT fibers. Against the backdrop of plastic-reduction policies accelerating the adoption of biodegradable plastics, this anti-dumping action will directly impede Europe’s green transition. Polyester Spunbond Nonwoven Anti-Dumping Case: On May 13, the European Commission issued its preliminary ruling in the anti-dumping investigation into Chinese polyester spunbond nonwovens, deciding to impose provisional anti-dumping duties effective May 14—ranging from 45.6% to 50.0%.

China’s Chemical Exports Face EU Trade Measures Amid Job Loss Concerns

2 days ago

Paul Hodges' blog post analyzes how EU trade measures targeting job losses could negatively impact China's chemical exports. The article highlights potential supply chain disruptions as Brussels readies significant trade actions.

icis

2026-10-05

China’s Chemical Exports Face EU Trade Measures Amid Job Loss Concerns

China’s Chemical Exports Face EU Trade Measures Amid Job Loss Concerns

FAQ