The European Union on Wednesday unveiled two measures aimed at protecting its steel industry and curbing the surge in low-value e-commerce imports as the 27-member bloc grapples with its widening trade imbalance with China.
"Today's change is about restoring fairness for European businesses and better protecting our consumers," European Commission President Ursula von der Leyen said in an online post, welcoming a new €3 (£2.58/$3.42) customs duty on low-value parcels.
"The surge in low-value online imports has put our retailers at an unfair disadvantage. Too many of these products also fail to meet EU safety standards, putting consumers at risk," she said.
The European Commission said new steel import rules are designed to protect European factories and jobs from "the damaging impacts of global overcapacity" in what it described as "a strategically crucial European industry".
China's extensive subsidies for steel production have prompted critics in Brussels and elsewhere to argue that they undermine steel industries from Germany's Ruhr Valley to Japan's Kyushu Island.
The EU's trade deficit with China widened to around €360 billion ($410 billion) in 2025 — roughly €1 billion a day — and is continuing to grow in 2026.
China's global trade surplus reached a near-record $1.2 trillion last year despite higher tariffs imposed by the Trump administration. Although China remains heavily dependent on Persian Gulf energy supplies, the war in Iran has not disrupted its export-led economy, with overseas sales of high-tech products and vehicles continuing to rise.
From Wednesday, the EU abolished the de minimis customs exemption for parcels valued at less than €150. According to the Commission, Chinese e-commerce platforms such as Temu and Shein account for around 90% of these imports. The United States introduced a similar measure last year.
The Commission said 5.9 billion small parcels entered the EU in 2025, up from around 1.4 billion in 2022. That equates to approximately 16 million parcels a day, accounting for 97% of all parcel traffic but only 2% of the total value of imports. A majority of the packages reportedly failed safety tests and raised concerns over excessive plastic packaging.
"Europe finally shows teeth against the flood of cheap parcel deals," Bernd Lange, chair of the European Parliament's trade committee, wrote in an online post.
However, Gary Ng, a research fellow at the Central European Institute of Asian Studies, said the €3 fee was unlikely to have a major impact given the large price gap between European and Chinese products.
While it may discourage small purchases and impulse buying, he said consumers and online platforms could still consolidate purchases into larger group orders.
The new rules establish tariff-free import quotas of 18.3 million metric tonnes a year and impose a 50% duty on imports exceeding those quotas across 26 categories of steel products.
Importers will also be required to provide greater transparency on where the "melt and pour" stage of production took place to prevent countries such as China from circumventing the rules by routing products through third countries.
The EU introduced additional steel tariffs in October to shield the bloc from a surge in imports diverted by changes to US trade policy under President Donald Trump.
Europe's steel industry is facing a deepening crisis, with crude steel production falling to a historic low in 2026, according to the European Steel Association.
"Europe's steel production is shrinking while imports as a share of the EU market are rising," the association's director general, Axel Eggert, said in March. "EU policymakers must therefore agree the new steel trade measure quickly without weakening it. Otherwise, Europe risks losing more industrial capacity."
Although China produces more than half of the world's steel, the EU imports most of its steel from partners including the UK, Ukraine, India, Taiwan, Türkiye, Japan and South Korea. The new measures could lead to disputes under free trade agreements with countries such as Japan, although some exemptions have been granted to Ukraine as it continues to defend itself against Russia's invasion.
A European Commission official, speaking anonymously because they were not authorised to comment publicly, said the bloc remained open to working with like-minded partners to tackle global overcapacity.
"In an ideal world there is fair competition and a level playing field. Unfortunately, we do not seem to live in an ideal world," the official said.
Alicia García-Herrero, chief economist for Asia-Pacific and the Middle East at French bank Natixis, said Beijing would oppose the new measures even though they do not explicitly target China.
"The Chinese do not want this instrument to work. This could be a springboard for more," she said. "It opens the door to broader instruments to tackle overcapacity."
China's Ministry of Commerce warned the EU in May against introducing new steel import regulations and said Beijing would respond firmly to any "discriminatory measures" targeting Chinese companies or products.
Chinese analysts have also warned of growing international resistance to the country's export-driven industrial strategy.
In a recent report, the Centre for International Security and Strategy at Tsinghua University identified "China Shock 2.0" — a surge in heavily subsidised advanced Chinese exports flooding global markets — as one of the country's top security risks.
The report warned that additional EU tariffs, combined with protectionist policies in the US, could encourage other countries to introduce higher tariffs and tighter investment screening targeting Chinese firms.
It described the trend as a "wolf pack effect", in which multiple countries act together, causing not only economic losses for China but also damaging its strategic environment and international business reputation.
Beijing has rejected the "China Shock 2.0" narrative, arguing instead that China's technological advances provide opportunities and shared benefits for the global economy.
While the EU has adopted a less confrontational approach towards China than the Trump administration, HSBC economists Frederic Neumann and Justin Feng said in a research note that "the direction of travel is clearly shifting in Brussels".
In June, leaders of the Group of Seven (G7) agreed to strengthen independent supply chains for critical minerals essential to defence and high-tech industries.
"China and the EU are partners, not rivals," Chinese Foreign Ministry spokesperson Guo Jiakun said on Tuesday. "The root cause of the EU's problems does not lie with China."
HSBC economists said China's ability to withstand higher US tariffs and the global energy shock linked to the US-Iran conflict suggested Beijing was now less likely to make concessions to the EU.
"The near-term outlook points to limited progress towards a comprehensive China-EU settlement," they said.
García-Herrero argued that although the EU remains a crucial market for China — receiving around 90% of China's battery exports and 60% of its electric vehicle exports — Beijing believes it can prevent a united European response by lobbying individual member states.
"China thinks Europe has no leverage," she said. "They believe they have the upper hand."
China's Commerce Minister Wang Wentao met EU Trade Commissioner Maroš Šefčovič in Brussels on Monday.
"The EU remains open for business, but we need to defend our industrial base and continue pushing for a level playing field globally so our industries have a fair chance to compete," Šefčovič said after the meeting.
He has set an October deadline for meaningful progress in rebalancing trade during a planned visit to Beijing.
"The status quo is not an option," he said.