The French cognac industry says it’s being held hostage to an EU trade probe into Chinese electric vehicles.

Chinese makers of low-flow taps, garden gear and insulated drinkware are seeing European orders surge as heatwaves and drought reshape demand.

The article examines growing economic and political tensions between the European Union and China, as Europe reassesses its heavy dependence on Chinese imports. European leaders and policymakers are increasingly concerned about trade imbalances, industrial vulnerability, and the rapid influx of Chinese goods, particularly electric vehicles, into European markets. These concerns have intensified as China continues to expand its manufacturing dominance while using state subsidies and industrial policy to boost exports. Senior European officials, including EU diplomats, have warned that reducing reliance on China may be painful but necessary, with some comparing the process to a difficult medical intervention due to the structural dependence built over decades. Think tanks and economists quoted in the article describe a sense of urgency and even panic in parts of Brussels, as policymakers fear the potential collapse of key European industries such as automotive and chemicals, especially in manufacturing-heavy economies like Germany. At the same time, China has signalled that it will retaliate against any protectionist measures, raising the risk of escalating trade disputes. Measures under consideration by the EU include new industrial policies aimed at strengthening domestic production and limiting foreign access to subsidies, particularly in strategic sectors like green technology and electric vehicles. However, European leaders face a difficult balancing act: protecting domestic industry while avoiding retaliation that could harm exporters and consumers who benefit from cheaper Chinese goods. The article also highlights the geopolitical dimension of the dispute, noting that strained US–EU relations and shifting global alliances may be influencing China’s more assertive trade posture. Upcoming international meetings, including G7 discussions and EU leadership summits, are expected to further shape the direction of trade policy. Overall, the piece portrays a growing risk of a structured economic confrontation between Europe and China as both sides harden their positions.

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