The year 2025 marks a sharp turning point in international relations. While Brussels was still recently extolling the virtues of free trade, the reality on the ground has changed: we have entered into full-blown economic warfare in Europe. Caught between a hostile Trump administration and a China flooding the market with low-cost products, the Old Continent finds itself isolated. Can Europe remain a beacon of democracy as the struggle intensifies, or is it doomed to become a victim of new forms of imperialism?
The roots of economic warfare Europe: The end of naivety
For decades, the European Union has built its prosperity on an optimistic vision of globalisation. We believed that trade interdependence guaranteed peace. We failed to account for the nationalist awakening of the major powers. Today, Europe realises that it is the only one to respect rules that its rivals ignore. This economic war is not being fought with tanks, but with customs barriers, disguised subsidies and technological standards. If the EU continues to leave its doors wide open without demanding reciprocity, it risks simply being written out of history. Globalisation is dead… make way for power politics.
The Eastern Front: Chinese dumping, “Trojan horse” and the spectre of solar power
The first assault comes from Asia. China, faced with weak domestic consumption, has chosen to export its overproduction at any cost. The figures are staggering: the EU’s trade deficit with China is now close to €300 billion per year. Beijing is flooding the European market with its surpluses at unbeatable prices. In the strategic electric car market, the share of Chinese brands has risen from 0.5% in 2019 to nearly 15% at the end of 2025. Thanks to state subsidies, these vehicles are priced on average 20% lower than European models.
The danger is existential: Europe fears repeating the disaster of the solar panel industry, which is now 95% dominated by China following the bankruptcy of European manufacturers. What’s more, a new threat is emerging: the “Trojan horse” strategy. To circumvent European taxes, manufacturers such as BYD are now setting up factories directly within the EU (particularly in Hungary), rendering customs barriers ineffective.
The Western Front: The clash of American protectionism
On the other side of the Atlantic, the historic alliance is crumbling. Under the Trump administration, the United States is embracing unapologetic protectionism (“America First”). The bill is already here: Europe is still subject to the tariffs inherited from “Section 232” (25% on steel and 10% on aluminium). But the worst is yet to come. Washington is now threatening to impose a universal tariff of 10 to 20% on all imports. Washington no longer sees Europe as a privileged partner, but as a competitor to be weakened. For a country like Germany, whose largest customer is the US, this scenario would represent an industrial shock estimated at more than €30 billion in annual losses. This economic subjugation directly threatens European sovereignty.
ZOOM: The CBAM, the EU’s anti-dumping
weapon To avoid suffering from this economic war, Europe has unveiled a new tool: the Carbon Border Adjustment Mechanism (CBAM).
It is a “carbon tax” applied to imports. If a foreign product (steel, cement, aluminium) has been manufactured in a way that pollutes more than European standards allow, it is taxed upon entry. This achieves two things:
It protects European manufacturers who are making ecological efforts against unfair competition.
It forces China and others to “green” their production in order to continue selling in Europe. This proves that environmentalism can be a lever of power.
The internal divide: Europe versus Europe
The real tragedy of this economic war is that Europe is unable to respond with a single voice. A clear divide splits the continent:
- Germany, the paralysed giant: Berlin opposes strict protectionist measures. Its manufacturers (BMW, Mercedes, VW) make 30 to 40% of their profits in China. They are terrified at the idea that Beijing might retaliate by blocking access to its market.
- France on the offensive: With only a small market share in China, French manufacturers (Renault, Stellantis) are pushing for strong customs barriers to protect the local market. This divergence of interests, coupled with the murky game played by countries such as Hungary, which are courting Chinese investment, is paralysing the European response.
Faced with this bleak picture, has Europe already lost? No, provided it radically changes its approach. To emerge stronger from this crisis, the EU must transform this economic war into an opportunity for renewal.
Europe must activate three levers to become a respected power:
- Harness the power of the Single Market: With 450 million affluent consumers, we can impose our standards. Access to the European market must be conditional on compliance with strict rules (environmental, social).
- Strategic Autonomy: We must reindustrialise key sectors (health, energy, digital) so that we are no longer dependent on the whims of Washington or the factories of Shenzhen.
- A “Third Way” for democracies: Europe can unite medium-sized powers (Japan, Canada, Korea) that reject the bipolarisation of the world.
Ultimately, this economic war leaves Europe with only one alternative: to unite and become a sovereign power, or resign itself to being the playground of rival empires. It remains to be seen whether the 27 will have the political courage to act before the noose tightens for good.
