BRUSSELS (AP) 鈥� The European Union rolled out two measures to protect its steel industry and limit e-commerce small parcels on Wednesday as the 27-nation bloc grapples with its staggering trade imbalance with China.
鈥淭oday鈥檚 change is about restoring fairness for European businesses and better protecting our consumers,鈥� European Commission President Ursula von der Leyen said in an online post praising a new 3 euro ($3.42) customs duty on small packages. 鈥淭he surge in low-value online imports has put our retailers at an unfair disadvantage. Too many of these products also fail to meet EU safety standards, putting consumers at risk.鈥�
The Commission said new rules on steel imports are designed to protect EU plants and jobs from 鈥渢he damaging impacts of global overcapacity鈥� on 鈥渁 strategically crucial European industry.鈥� China鈥檚 subsidies for steel production have led critics in Brussels and beyond to charge that policy undercuts steel industries from Germany’s Ruhr valley to Kyushu Island in Japan.
The EU’s trade deficit with China widened in 2025 to around 360 billion euros ($410 billion) 鈥� or roughly 1 billion euros a day 鈥� and is rising in 2026.
China鈥檚 annual global trade surplus reached a near-record last year even after higher tariffs introduced by the Trump administration, and despite China鈥檚 dependency on Persian Gulf energy, the has China鈥檚 export-led economy with sales of high-tech goods and vehicles abroad .
Flood of small packages has destabilized main street
From Wednesday, the EU will remove an customs duty exemption called 鈥渄e minimis鈥� for parcels valued at under 150 euros. Chinese firms like the e-commerce giants Temu and Shien control about 90% of this type of trade, according to the Commission. The U.S. made a similar move last year.
The Commission said 5.9 billion small packages were imported into the EU in 2025, compared with about 1.4 billion in 2022. At roughly 16 million a day, that鈥檚 97% of the traffic, but represents just 2% of import value. A majority of the packages were said to have failed safety tests and triggered environmental concerns on overuse of plastic.
鈥淓urope finally shows teeth against flood of cheap package deals,鈥� said Bernd Lange, the head of the European Parliament鈥檚 trade committee in a post online.
Yet the 3 euro tax might 鈥渘ot affect the big picture鈥� as it’s minimal compared to the price gap between Europe and China for goods like e-commerce, according to Gary Ng, a research fellow at the Central European Institute of Asian Studies.
While it may be effective in reducing small orders and impulse purchases, Ng said that customers and e-commerce platforms can still make group orders.
EU steel under threat
The new rules set tariff-free quotas at 18.3 million metric tons annually and imposes an out-of-quota duty of 50% on 26 types of steel imports. It also requires more transparency from importers to trace where the so-called 鈥渕elt and pour鈥� stage of production takes place to ensure countries like China will not circumvent protections by shipping products to the EU via third countries. The EU had put in to protect the bloc from a flood of steel imports diverted by new U.S. trade policy under Trump.
Europe’s steel industry is in crisis, with crude steel output falling to a 鈥渉istoric low鈥� in 2026, according to the European Steel Association.
鈥淓urope鈥檚 steel production is shrinking while imports as a share of the EU market are rising,鈥� said the trade group鈥檚 director-general Axel Eggert in March. 鈥淓U policymakers must therefore agree the new steel trade measure quickly without it being weakened otherwise Europe risks losing more industrial capacity.鈥�
While China producers more than half of the world’s steel, the EU imports mostly from trade partners like the U.K., Ukraine, India, Taiwan, Turkey, Japan and South Korea. The new tariffs could trigger penalties in free trade agreements with nations like Japan but some exemptions have been granted to Ukraine as it battles Russia.
鈥淲e will remain open to engage 鈥� call it a club, call it an alliance, call it whatever you like 鈥� but the idea that we come together with like-minded partners on this global challenge of overcapacity in the market,” said a Commission official tasked with communicating policy but not authorized to be named. “In an ideal world there is fair competition and level playing fields. Unfortunately, we don鈥檛 seem to live in an ideal world.鈥�
Beijing will oppose the new rules even if they do not directly target China, said Alicia Garc铆a-Herrero, a chief economist for Asia Pacific and Middle East at the French bank Natixis.
鈥淭he Chinese do not want this instrument to work. This could be a springboard for more,” she said. 鈥淚t opens the door to the overall overcapacity instruments to see how it works.鈥�
China鈥檚 Ministry of Commerce in May warned the EU against new steel import regulations and said China would firmly respond to 鈥渄iscriminatory measures鈥� against its companies and products.
‘Wolf pack effect’
Some experts in China have raised the alarm over growing backlash to mass exports.
In a recent report, the Center for International Security and Strategy at Tsinghua University in Beijing identified 鈥� 鈥� 鈥� a massive surge of highly subsidized, advanced Chinese manufacturing exports flooding global markets 鈥� as one of the top 10 perceived security risks for China. It warned that the EU would likely impose additional tariffs on China that, together with protectionist sentiment in the U.S., might inspire other nations to follow suit with 鈥渟teep tariff hikes and investment screening鈥� targeting Chinese firms.
“What makes this risk distinctive is that it does not originate from a single adversary. It is the 鈥榳olf pack effect鈥� of multiple countries acting in concert, inflicting not only direct economic losses on China but, more profoundly, degrading its strategic environment and international business reputation,” the report stated.
Beijing has at the concept of defending it instead as an 鈥渙pportunity鈥� which brings the world wider shared benefits from China’s tech innovations.
While the EU has not been as combative with China as the Trump administration, 鈥渢he direction of travel is clearly shifting in Brussels,鈥� HSBC economists Frederic Neumann and Justin Feng wrote in a research note on Tuesday.
In June, leaders from the Group of Seven nations issued a joint call to develop independent supply chains for critical minerals so crucial for defense and high-tech industries.
‘Status quo is not an option’
鈥淐hina and the EU are partners, not rivals,鈥� Guo Jiakun, a spokesperson for the Chinese Ministry of Foreign Affairs, said on Tuesday. 鈥淭he root cause of the EU鈥檚 problems does not lie with China.鈥�
China鈥檚 recent success handling Trump鈥檚 escalated tariff threats last year suggests it 鈥渃an withstand external pressure,鈥� according to Neumann and Feng, who said Beijing leveraged its control of rare earth supply chains to forge a truce on trade with Washington.
鈥淚f China managed a U.S. tariff ramp-up and the global energy shock during the U.S.-Iran conflict, it may show less inclination to make concessions to the EU,鈥� the economists said. 鈥淭he near-term outlook points to limited progress towards a comprehensive China-EU settlement.鈥�
Garc铆a-Herrero said that despite the importance of the EU鈥檚 common market to China 鈥� 90% of battery and 60% of its electrical vehicles exports go to the bloc 鈥� there is a perception in Beijing that they can successfully dissuade common action by lobbying national capitals in the EU.
鈥淐hina thinks Europe has no leverage,鈥� she said. 鈥淭hey do think they have the upper hand, by all means.鈥�
China’s Minister of Commerce Wang Wentao met with the EU鈥檚 trade representative Maro拧 艩ef膷ovi膷 in Brussels on Monday.
鈥淭he EU remains open for business but we need to defend our industrial base and keep pushing for a level playing field globally, so our industries get a fair shot at competing,鈥� 艩ef膷ovi膷 said after the talks. 鈥淭hat is why today鈥檚 talks 鈥� and the ones to follow 鈥� matter.”
He has set an October deadline for meaningful results in rebalancing trade during a visit to Beijing.
鈥淭he status quo is not an option.鈥�
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Chan reported from Hong Kong.
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