Fears of new China shock as EU industry’s reliance on imports grows

Europe faces a renewed "China shock" as rapidly rising imports of Chinese components — not just finished goods — are increasingly embedding into EU supply chains, pressuring domestic industry and fuelling job losses. Analysts warn a combination of state subsidies and an effectively undervalued yuan (cited up to ~40% vs the euro) has made Chinese inputs 30–50% cheaper, undermining European producers and nullifying measures such as 2024 EV tariffs. Brussels will hold emergency talks on 29 May and is considering rules to diversify suppliers and new industrial laws, but actions likely won’t take effect until 2027. The piece highlights large job losses in Germany (c.250,000 since 2019; 22,000 in machinery last year), rising bilateral deficits, and the political challenge of calibrating trade responses without provoking retaliation.