Europe fears China could dump goods meant for US at cheaper price, will hurt local firms

European officials and industries are increasingly concerned that China’s surplus goods, originally intended for the US market, may flood European markets at reduced prices due to recent reciprocal tariffs imposed by President Donald Trump amid an ongoing trade war, according to a report from The New York Times.

With many Chinese goods now hit by high tariffs from Trump, there is growing concern that these products will be redirected to Europe, hurting local industries in France, Germany, Italy, and across the EU.

“The issue of overproduction has been building for a while, and now it’s reached Europe,” said Liana Fix, a fellow at the Council on Foreign Relations. “There’s a growing sense here that Europe needs to protect its own interests.”

EU chief speaks to Chinese Premier

Earlier, the European Commission President Ursula von der Leyen spoke with China’s Premier Li Qiang about the risk of cheap Chinese goods flooding the EU market, as Trump’s new reciprocal tariffs shake up global trade.

In a statement after the call, the Commission said von der Leyen highlighted the need for stability and predictability in the global economy. She also said that both Europe and China, as two major markets, have a shared responsibility to support fair and balanced global trade.

Parcels from Chinese online retailers like Shein and Temu are set soon face stricter customs. This comes as the European Commission cracks down on “dangerous products” entering the EU.

EU pushing to remove tax exemption for parcels under €150

EU officials are also pushing to remove the current tax exemption for parcels under €150, which allows foreign sellers to avoid paying customs duties on cheap goods.

The Commission said many of these low-cost items do not comply with EU rules, and that European businesses playing by the rules are being undercut by sellers offering unsafe or counterfeit products.

Trade war with China and nervousness among investors

The US has imposed a 145 per cent tariff on Chinese imports, prompting Chinese exporters to seek alternative markets for their goods. In retaliation, China, escalating the trade war, imposed 125 per cent tariffs on imports from the US.

Europe, already grappling with overcapacity in sectors like solar panels and electric vehicles, fears an influx of these redirected products could undercut local businesses. In 2024, the EU reported a trade deficit with China of €304.5 billion ($347 billion), partly attributed to unfair subsidies.