More than three years ago, European Commission President Ursula von der Leyen delivered a comprehensive assessment of China that has now become one of the most discussed texts within the European Union. In her March 2023 speech, von der Leyen described EU-China relations as among the world’s most complex and important.
At a time when the European agenda was dominated by Russia’s war in Ukraine, such a focused statement on China by an EU leader drew significant attention. In the first part of her speech, von der Leyen sharply criticized Chinese President Xi Jinping’s "unlimited friendship" with Russian President Vladimir Putin.
Economic Tensions Took Center Stage
The main focus of the speech was economic rather than security-related. Von der Leyen highlighted China’s market-distorting subsidies, unfair competition practices, coercive measures, growing imbalances, pressure on technology transfer, and dominance in critical raw materials. She emphasized the need for a new approach, which she termed "risk reduction."
These very issues are at the heart of the rapid reassessment currently underway within the Commission. There is increasing recognition in Brussels that low-cost imports from China are straining the European economy, causing job losses in some sectors and factory closures.
Although von der Leyen did not explicitly use the term "deindustrialization" in that speech, her message was clear: the need for security and control outweighs the logic of free markets and open trade.
EU Member States Failed to Reach Consensus
While some analysts viewed the 36-minute speech as a clear and grounded assessment, Chinese officials criticized it as misleading and inconsistent. However, von der Leyen’s primary audience was neither commentators nor Beijing; her message was directed at the member states who make the final decisions.
The Commission President warned capitals, saying, "We need a common will to respond together." Yet, this is precisely where the EU’s chronic divisions emerged. Member states failed to agree on a common definition of risk reduction toward China, and von der Leyen’s calls for trade diversification largely went unheeded.
The imbalanced situation, accelerated since the COVID period, deepened further. The year 2025 marked the first time every EU country recorded a trade deficit with China. Meanwhile, some governments left responsibility to the private sector, and companies were reluctant to bear the higher costs of distancing themselves from China.
Trade Tools Partially Effective, Some Shelved
Brussels achieved limited success in imposing additional tariffs on Chinese electric vehicles, but this process sharply divided member states. Spain became neutral after its prime minister’s visit to Beijing, withdrawing support, while Germany pushed for a tougher stance to build a majority.
During the same period, the Commission took steps to strengthen domestic production in certain areas and exclude Huawei and ZTE from connection infrastructure. However, it failed to convince capitals to increase control over sensitive exports. Von der Leyen’s economic security strategy advanced but remained limited in scope.
The idea of new tools to monitor foreign investments was withdrawn amid political backlash. The Anti-Coercion Instrument, designed with the China factor in mind and capable of directly targeting Beijing, has yet to be fully implemented despite von der Leyen’s explicit accusations of "blackmail" against China.
Brussels Seeks a Tougher Line
Fabian Zuleeg, head of the European Policy Centre, says von der Leyen diagnosed the issue correctly early on. According to Zuleeg, the problem is no longer just economic opportunity but also dependency and economic security risk in relations with China. The main challenge remains the lack of a common decision on what to do.
Recent calls by European leaders like Emmanuel Macron and Bart De Wever for a tougher stance on China have caught the Commission’s attention. This shift indicates that von der Leyen’s more assertive approach voiced years ago is slowly gaining traction in Europe.
The Commission believes the growing trade deficit could open space for a stronger strategy. It is currently evaluating whether existing trade tools are sufficient or if new mechanisms are needed.
In an assessment this week, von der Leyen said they want dialogue but it must produce results. She acknowledged competition but stressed it must be fair. She also clearly stated that reciprocity is expected in access to the Chinese market.
Nevertheless, Brussels knows the path ahead will not be easy. As the world’s second-largest economy, China wields significant economic influence over EU countries. Billions of euros in goods, services, investments, and infrastructure projects make European capitals cautious.
For export-driven economies, the Chinese market remains an important alternative to the US. Germany and Spain, in particular, are under scrutiny due to their close trade ties with China. Berlin sends mixed signals as it tries to balance the interests of large and small companies, while Madrid has distanced itself from a draft calling for a more proactive stance against China supported by France, Italy, the Netherlands, and Lithuania.
Von der Leyen and her team are also concerned about Beijing’s "divide and rule" strategy, which they believe has undermined unified EU action by splitting member states. The tough vote on electric vehicle tariffs is remembered as a clear example of this approach.
The greatest worry is potential retaliation. Beijing has already warned it will respond decisively if Brussels takes tougher measures. Last year’s restrictions on rare earth element exports demonstrated China’s power in critical sectors once again.
Diplomats say the key issue is this: even if countries agree on a common diagnosis of China, they hesitate over the cost of retaliatory measures. As a result, China is often not explicitly named in summit declarations, with the topic addressed under broader headings.
Although the growing trade deficit within the EU increases the likelihood of a tougher policy, this is not guaranteed. Member states want the Commission to shoulder the difficult task alone but are reluctant to share the costs of heightened tensions with China. This explains why von der Leyen’s warning from years ago still has not fully resonated today.
