EU Risks 300,000 Factory Job Cuts as China 'Colonises' Supply Chains, Industry Says

Job losses in EU manufacturing could reach 300,000 by the end of 2026 unless Brussels intervenes against the increasing influence of Chinese component manufacturers, according to Eurometal. The warning highlights the expanding competition from China, which is currently achieving a €1 billion-a-day trade surplus with the EU.

Eurometal plans a protest in Brussels on Monday, featuring a procession with 10 symbolic coffins around the European Commission headquarters.

The coffins will carry messages highlighting issues like “EU competitiveness,” “industrial jobs,” and “European factories.”

Growing Chinese Supply Chain Control Concerns EU Manufacturers

European manufacturers express concerns that the commission may not recognise the threat of industry cannibalisation by China as it integrates into supply chains via component sales. Alexander Julius, president of Eurometal, emphasised that China's intentions are clear in their five-year plan.

He added, China aims to dominate finished product supply chains rather than solely serve as a raw material supplier, recognising that control over supply chains equates to ownership of the entire value chain. The commission is urged to grasp the significance of Chinese exports, particularly regarding components like metals and chemicals, which are essential in 90% of manufacturing.

Remarkably, the EU has imposed tariffs on Chinese electric vehicle imports in 2024 and has introduced higher tariffs on foreign steel. Trade Commissioner Maroš Šefčovič noted the unsustainable €360bn annual import/export imbalance with China, and both parties have agreed to three months of negotiations, concluding in October, to prevent a trade war.

Policy Costs at Eurometal Promote European Business Abroad

Julius highlights the job losses in industries, particularly in Germany, and criticises the media and politicians for not addressing the underlying causes, specifically the virus, leading to company relocations to countries like China or India or bankruptcies.

Among the factors contributing to the spread of the “virus” are the rising costs for European metal manufacturers due to tariffs on steel imports and carbon emissions taxes affecting high-energy sectors.

Likewise, Julius noted that components produced in China are not subject to these charges, and the undervalued Chinese currency, the yuan, further complicates competition with Chinese firms. Companies will prioritise shareholder satisfaction and maintain purchases from China, regardless of the political statements from Brussels, he said.

Eurometal warned that Europe's departure from manufacturing leads to a loss of production, investment, expertise, and long-term economic resilience.

EU Secures China Trade Truce Amid Job Loss Warnings

In June, the European Commission's analysis indicated that high energy costs and increasing global competition could lead to job losses exceeding 1 million in Europe, including 100,000 confirmed layoffs at Volkswagen.

Furthermore, China has accused Europe of engaging in protectionist practices and warned of “resolute countermeasures” if the EU continues to target Chinese companies or products, as reported by the state-owned Xinhua agency. Following these tensions, a three-month truce was agreed upon between the EU and China.

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