Five EU member states landed a joint paper in Brussels on 24 May, demanding an emergency crackdown on Chinese industrial overcapacity: faster tariffs, wider safeguards, new anti-circumvention powers. France, Spain, Italy, the Netherlands and Lithuania all signed. Germany did not.
While the coalition was building in Brussels, Germany's Trade Minister Katherina Reiche was in Beijing, meeting Chinese counterparts to strengthen industrial cooperation. The timing was deliberate.
Germany's resistance to tougher EU trade measures is rooted in hard commercial exposure. Around 5,200 German companies operate in China. For Germany's automotive, mechanical engineering and electrical sectors — the backbone of its export economy — China is one of the world's most important single markets. Despite a steadily widening bilateral trade deficit and growing Chinese competition in European markets, Berlin has consistently concluded that preserving access to China matters more than retaliating against Chinese subsidies.
That position has come under increasing scrutiny. A Centre for European Reform analysis published this year argued that Germany's tolerance of Chinese industrial penetration is producing measurable economic damage — particularly in sectors where Chinese manufacturers now compete with German firms in third markets, not just at home. The argument is no longer purely about what China sells into Europe; it is about what Germany is losing elsewhere.
Without German support, the Commission cannot move as far as the five-country coalition wants. Germany retains the ability to block or water down EU trade measures, and has exercised that capacity before. The non-paper is as much a political signal as a policy demand: it puts Berlin's resistance on the record and applies pressure before the 29 May debate, when the EU must decide what mandate it is willing to give itself on Chinese overcapacity.
The debate is not simply about steel or electric vehicles. It is about whether the EU can act as a coherent trade bloc when its largest economy has structural interests that diverge from the majority. France and its partners are betting the political wind has shifted enough to break Germany's blocking logic. Berlin is betting it has not.
The 29 May Commission debate is a genuine inflection point. If Germany continues to resist while four other major economies push for action, the EU faces a choice between diluted measures that satisfy no one and a protracted internal standoff. For European industry — from steelmakers to solar panel manufacturers competing against Chinese rivals — what Brussels decides in the next few weeks will have consequences that outlast any diplomatic communiqué.
