EU sounds out industry over new trade weapon against China’s overcapacity

The European Commission is quietly building support among EU industry groups for a new trade weapon aimed at addressing Chinese overcapacity. According to sources, the Commission has approached several business associations to solicit feedback on the proposed instrument, though it has revealed almost no operational details. The tool is expected to be presented to Commission President Ursula von der Leyen on May 29, during a rescheduled debate on China involving all 27 commissioners. The original debate in April was postponed as commissioners focused on how the US-Israel conflict with Iran would affect EU energy prices.

Few specifics have emerged about the instrument itself. Industry groups report that the Commission is keeping its cards close, asking only whether members would welcome such a tool and what features they consider essential. The South China Morning Post previously reported that the instrument—along with other potential trade measures—was originally slated for April. Now, with the summer break approaching, Brussels appears to be accelerating its timeline. The move signals growing EU determination to counter what it views as unfair Chinese industrial overcapacity, particularly in sectors like solar panels, electric vehicles, and steel. If adopted, the new trade weapon could impose tariffs, quotas, or other restrictions on Chinese goods deemed to benefit from state-subsidised overproduction.