EU pushes Industrial Accelerator Act to counter surge in Chinese imports threatening European industries

BRUSSELS — A surge in Chinese imports that threatens to devastate European businesses has prompted industries to rally behind the European Commission’s Industrial Accelerator Act.

Industry insiders and experts warned EU lawmakers during a public hearing on Wednesday that time is running out to curb Beijing's export juggernaut.

They underlined the danger of a second Chinese export shock. The first came after China joined the World Trade Organization in 2001. It hammered labor-intensive, lower-tech European manufacturing, such as textiles, furniture, shoes, toys, and consumer electronics.

The next wave could be even more destructive, industry officials warned.

Unlike the first shock, the industries now under pressure include sectors that Europe considers central to its economic and technological future, such as electric vehicles and batteries, as well as steel, chemicals, and wind turbines.

The IAA is designed partly to blunt that pressure, limiting Chinese investments in strategic sectors like EVs, raw materials or solar panels. It would also set Made-in-EU requirements for public procurement, potentially excluding Chinese suppliers.

“Do it right or don’t do it at all,” Sander Tordoir, chief economist at the Centre for European Reform think tank, told MEPs.

Beijing has strongly objected to the IAA, but — despite some initial misgivings — it is gaining more support among EU countries and there is broad backing in the Parliament.

“The urgency has increased,” Green MEP Anna Cavazzini, co-lead on the file, said. She called the IAA a “cornerstone” of the EU’s response to China’s aggressive trade policies.

When it was first proposed, Germany was leery of angering China and Chancellor Friedrich Merz's government advocated for the Commission to take into account “whether countermeasures by third countries are to be expected.”

But the growing problems of Germany's car industry are changing minds in Berlin.

"Any company that accepts European taxpayers' money should do something to save European taxpayers’ jobs," Sebastian Schaffer, Volkswagen's top lobbyist in Brussels, said at the hearing.

The automaker is in the midst of negotiating a cost-cutting plan that could see 100,000 jobs lost and four factories in Germany shuttered — a first in the company’s history. Facing an economic crisis that is helping boost the far-right Alternative for Germany party, Merz is urging the Commission to take action to curb Chinese imports.

The EU now faces a €1 billion-a-day trade deficit with China. The value of vehicle and automotive part imports from China to the bloc grew from €14.5 billion in the first half of 2025 to over €20 billion over the same period this year, according to Eurostat data.

Berlin and other European capitals are pressuring the Commission to propose concrete measures by next month.

President Ursula von der Leyen last month called China "a key economic partner" and said lowering reliance on China should come "without breaking ties." However, she added that "being a partner does not mean accepting permanent imbalances" and highlighted that the EU's growing trade imbalance with China, often fueled by Beijing's subsidies, is leaving the bloc vulnerable.

"Dialogue with China remains necessary. But it must produce results. And when dialogue is not enough, we must be ready to make full use of our instruments," she warned.

The IAA may become the EU's most important tool for shielding European industry from the new wave of Chinese competition, Tordoir said.

"I think all of us have some uncertainty about whether the EU has the willingness to put forward the trade measures to respond to this threat, and so the IAA may be the main policy tool that the EU has," he said.