The European Union has implemented two significant measures aimed at addressing its substantial trade deficit with China and protecting domestic industries. These regulations include new tariffs on steel imports and the elimination of a customs duty exemption for low-value e-commerce parcels.
Steel Import Measures
The EU's new rules on steel imports are designed to shield its steel sector from the "damaging impacts of global overcapacity," a situation critics attribute partly to Chinese subsidies. These subsidies are accused of undercutting steel industries in Europe and beyond. The measures set tariff-free quotas at 18.3 million metric tons annually, with an out-of-quota duty of 50% applied to 26 types of steel imports. Importers will also face increased transparency requirements to track the origin of steel production, preventing circumvention through third countries. The European steel industry has faced a significant downturn, with crude steel output reaching a historic low in 2026.
E-commerce Parcel Regulations
Effective immediately, the EU will remove the "de minimis" exemption, which previously allowed parcels valued under 150 euros to enter the bloc duty-free. A new customs duty of 3 euros ($3.42) will be applied to these small packages. The European Commission stated that this move is intended to restore fairness for European retailers, who have been at an "unfair disadvantage" due to the surge in low-value online imports. Concerns were also raised about the safety standards of many of these products and the environmental impact of the high volume of plastic packaging.
According to the Commission, Chinese e-commerce giants Temu and Shein dominate approximately 90% of this type of trade. In 2025, the EU imported around 5.9 billion small packages, a significant increase from 1.4 billion in 2022. While these packages represent a small fraction of the total import value, a majority reportedly failed safety tests.
Broader Context and Reactions
These EU actions come as the bloc's trade deficit with China widened to approximately 360 billion euros ($410 billion) in 2025, with the trend continuing into 2026. China's overall global trade surplus also reached a near-record $1.2 trillion last year.
Some analysts suggest the 3 euro tax on parcels might have a limited impact on the overall trade balance, as customers could still opt for group orders. However, the measures signal a shift in the EU's approach to trade with China. A report by Tsinghua University's Center for International Security and Strategy in Beijing identified a "China Shock 2.0"— a surge of subsidized Chinese manufacturing exports — as a significant security risk, warning of a potential "wolf pack effect" as multiple countries enact protectionist measures.
Beijing has signaled its opposition to the new regulations, with the Ministry of Commerce warning against "discriminatory measures." Chinese officials have also defended their export model as an "opportunity" that benefits the global economy through technological innovation. Despite these tensions, EU Trade Commissioner Maroš Šefčovič met with China's Minister of Commerce Wang Wentao in Brussels, emphasizing the need for a level playing field and meaningful progress in rebalancing trade, setting an October deadline for results. The EU maintains its openness to business but insists on defending its industrial base.