Milan: For three years Europe has repeated the same phrase about China, de-risking, not decoupling, and for three years it has struggled to show what the phrase means in practice. In mid-2026 that is starting to change.
At the European Council on 19 June, heads of state handed the Commission a clear political mandate to strengthen the bloc’s defences against Chinese industrial overcapacity and other forms of what Brussels calls unfair competition. The debate ran for more than two hours, which in European summitry signals a genuine argument rather than a rubber stamp.
The numbers behind the frustration are stark. The EU’s trade deficit with China has swollen to roughly 360 billion euros a year, close to a billion euros every day. Behind that figure sits a pattern European manufacturers know well: heavily subsidised Chinese capacity in electric vehicles, solar panels, batteries and now chemicals, produced far in excess of Chinese demand and pushed onto world markets at prices domestic rivals cannot match.
The electric-vehicle tariffs that Brussels imposed marked the opening move, and the Commission has since launched a string of trade-defence investigations covering Chinese titanium, plastic inputs and phosphate chemicals. The direction is unmistakable: from a single high-profile case toward a broad, sector-by-sector effort to blunt the effects of overcapacity on the single market.
Italy feels this more acutely than most. Its industrial base, from automotive components to chemicals, competes directly with the goods arriving from Chinese plants, and its manufacturers have lobbied hard for Brussels to act. What looks like abstract trade policy in the summit communique reads, in Lombardy and the Veneto, as a question of whether factories stay open.
Yet the Commission is careful to keep the door open. De-risking was always meant to reduce exposure, not to sever a relationship worth hundreds of billions in two-way trade. Brussels wants to defend its market while preserving the channels, on climate, on market access, on investment, that still make engagement worthwhile. Squaring those two aims is the hardest part of the strategy.
Beijing, for its part, reads every tariff as provocation and has warned of retaliation against European farm goods, spirits and luxury exports. That threat gives pause to member states whose economies lean on the Chinese market, and it explains why the June debate lasted as long as it did. A united European front on overcapacity is easier to declare than to hold.
The Commission publishes the state of the relationship and its trade-defence caseload for anyone willing to follow the detail (European Commission).
What has shifted in 2026 is not the slogan but the resolve behind it. Europe has stopped debating whether Chinese overcapacity is a problem and started arguing about how forcefully to answer it. For a bloc that prizes consensus and caution, that is a meaningful change of gear.
