As EU leaders gather for the European Council on 18 June, the EU–China relationship is once again on the agenda. But repetition cannot substitute for strategy. Europe stands at a decisive moment: we must move beyond fragmented responses and agree on a coherent approach that defends our economic interests while upholding our core values — social progress, human rights and democracy.

Trade unions are clear: Europe needs a genuine industrial strategy that strikes the right balance between economic security and balanced partnerships. This means equipping the EU with a robust toolbox — effective trade defence instruments, stronger screening of foreign investment, and clear conditionalities to ensure that openness delivers tangible benefits for Europeans, starting with good industrial jobs.

Recent crises have exposed the risks of complacency. From pandemic disruptions to export restrictions on critical raw materials, Europe has learned the hard way that strategic dependencies can be weaponised. Control over key inputs — rare earths, chemicals, advanced components — is no longer just an economic issue; it is a source of geopolitical power.

At the centre of this shift is China’s rise as a dominant industrial force. What was once framed as mutual interdependence is increasingly an asymmetric relationship. China’s state-backed industrial model has enabled it to capture around 30% of global manufacturing and secure dominant positions in sectors from chemicals and steel to batteries and electric vehicles. The implications are stark: China is the EU’s largest source of imports, accounting for roughly one-fifth of the total, with trade in goods approaching €900 billion and a European deficit close to €300 billion.

This is not simply competition — it is market-shaping power. China now produces around 30 million vehicles annually, nearly three times the EU’s output. It holds commanding positions across entire value chains that are critical to Europe’s future.

For Europe, the vulnerabilities are systemic. Around 10% of EU imports fall into high-dependency categories, with China the dominant supplier in most cases. These pressures are already rippling through Europe’s industrial ecosystem. The chemicals sector, a backbone of European manufacturing, is under severe strain from a surge in low-cost imports linked to global overcapacity. A loss of 10% of capacity in just three years is not a routine market adjustment — it is an early warning sign of deindustrialisation.

When upstream industries weaken, the consequences cascade. Plants shut down, supply chains fragment, and entire industrial ecosystems become more fragile. Jobs disappear, and Europe’s reliance on external suppliers deepens. The risk is clear: once lost, industrial capacity is difficult — often impossible — to rebuild.

The same pattern threatens strategic sectors essential for the green transition, including batteries and automotive manufacturing. Without decisive action, Europe risks repeating the mistakes made in solar manufacturing, where it ceded technological leadership and became dependent on imports.

And yet, Europe’s relationship with China cannot be reduced to confrontation. It is defined by deep and complex interdependence. European companies are heavily invested in China, particularly in chemicals and automotive sectors, while Chinese investment in Europe is growing, especially in electric mobility and clean technologies. Many European jobs depend directly or indirectly on these economic ties.

This creates a structural dilemma. Escalating trade tensions could trigger retaliation — restricted market access, regulatory pressure or supply chain disruptions — with serious consequences for European workers. But failing to act risks further erosion of Europe’s industrial base.

The answer is neither passivity nor blanket protectionism. Europe needs a calibrated, proactive strategy that recognises both the necessity of industrial defence and the realities of interdependence.

First, the EU must strengthen and accelerate its trade defence instruments. The current tools are too slow and too narrow to address systemic challenges such as global overcapacity. The intensification of TDI cases in sectors like the chemicals industry in the past year is unsustainable. More horizontal instruments — similar to those used in response to steel overcapacity — should be developed.

Second, Europe needs a robust diversification instrument. Reducing excessive dependencies in strategic value chains must become a central policy objective. This means systematic risk monitoring and targeted support to diversify sourcing, production and investment — within Europe and with trusted partners. Diversification is not disengagement; it is resilience. It ensures that no single actor can exert disproportionate influence over Europe’s economy or the jobs that depend on it.

Third, the EU must rethink its approach to foreign direct investment (FDI). Investment is essential, particularly in sectors such as batteries, electric vehicles and clean technologies. But openness must be matched with safeguards. Too often, Europe has welcomed investment without ensuring that it delivers long-term value.

This must change. Investments in Europe should create quality jobs, respect workers’ rights and contribute to sustainable industrial development. Strong and enforceable social conditionalities are essential — including support for collective bargaining, skills development and the anchoring of production in Europe. Without these safeguards, Europe risks becoming merely a production platform, capturing limited value while strategic decisions are taken elsewhere.

Finally, Europe’s industrial policy must address entire value chains. Supporting downstream sectors alone is not enough if upstream industries — such as chemicals or basic materials — are allowed to decline. Strategic autonomy requires coherence across the production system.

This is not just an economic challenge; it is a political and social one. European industry provides around 30 million direct jobs, many in regions where it underpins local economies and communities. When unfair competition hollows out production or supply chains fail, the consequences are immediate and profound: plant closures, unemployment and widening regional inequalities.

Europe has already seen this story unfold. It cannot afford to repeat it in the industries that will define the future — batteries, hydrogen, electric mobility and beyond.

The European Council on 18 June must mark a turning point. Europe needs clarity, unity and determination. A strong industrial base, grounded in high social standards and resilient supply chains, is not just an economic objective. It is the foundation of Europe’s social model — and of its strategic sovereignty in a more contested world.

The choice is clear: shape the future or be shaped by it.