BRUSSELS — The EU wants to protect the bloc’s industrial base from a deepening Chinese incursion, but diverging national interests are undermining efforts to maintain a united front.

That task is becoming even more difficult as the bloc tries to boost global trade ties while U.S. President Donald Trump delivers tariff threats and upends the geopolitical order.

Spain and Hungary, among others, have opened their countries to investments and factories from Chinese companies, yet France wants a harder EU line on safeguarding the bloc’s industrial backbone by taking further trade actions.

Spanish Prime Minister Pedro Sánchez is the latest to make the pilgrimage to Beijing, meeting Chinese leader Xi Jinping this week on his fourth trip in as many years. For Sánchez, it’s an opportunity to attract investment, while Xi bolsters ties with a key EU capital.

Sánchez defended the EU-China relationship on Tuesday, calling it a bond “based on trust, dialogue, and stability” and the ultimate goal of a “multipolar order built from respect and pragmatism.”

He was following in the path of other EU leaders who have visited China in the last year, including Emmanuel Macron of France, Irish Prime Minister Micheál Martin, Finland’s Petteri Orpo, Portuguese Prime Minister Luís Montenegro, German Chancellor Friedrich Merz and both of the EU’s top bosses: European Commission President Ursula von der Leyen and European Council President António Costa.

The uptick in trips shows the EU’s need to cultivate relations with China, but they come at the same time as the Commission works to limit Beijing’s subsidies to sectors like cars and aims to take a tougher stance on Chinese investment in sensitive economic sectors.

The attraction is obvious.

China has the world’s third-largest economy with a GDP of $20.8 trillion, behind the U.S. at $32.4 trillion and the EU’s $23 trillion, according to the International Monetary Fund.

But selling into China is increasingly difficult for Europe’s automakers and chemical suppliers as Chinese consumers turn to domestic producers and Beijing imposes more requirements on foreign companies. China is also a growing competitive threat in Europe, something Merz underlined during his trip, emphasizing a surging trade imbalance with Beijing.

With Trump’s tariffs limiting China’s access to the U.S. market, imports previously destined for American consumers are being rerouted to Europe. The bloc’s bilateral trade deficit ballooned to over €350 billion in 2025, up nearly a fifth from 2024.

“We lose 10,000 manufacturing jobs every month,” said Joerg Wuttke,a partner at DGA-Albright Stonebridge Group who advised Merz ahead of his visit to Beijing. He singled out the chemicals, machinery and automotive sectors as those suffering the most. “That has to do with the fact that, of course, China is pushing their products into the European Union.”

Cautious on China

That pressure is pushing Brussels to act.

The Commission is wary of China’s economic influence and technological development. Beijing has leapfrogged the continent across a range of technologies: from batteries to electric vehicles, solar panels and artificial intelligence. And Beijing’s stranglehold on key resources — like rare earth elements — has policymakers spooked.

Von der Leyen has expressed frustration that several years of high-level summits have failed to deliver any shift away from subsidizing Chinese production toward stimulating consumption. “The current imbalances in the relationship are no longer sustainable,” Olof Gill, the Commission’s deputy chief spokesperson, said.

Brussels is now looking to take more sweeping action to restrict Chinese investment while shoring up the bloc’s own industrial giants. Divisions among the EU’s capitals, however, are complicating efforts to agree on a joint strategy toward China.

While the Commission tries to get tough, Chinese inroads go beyond exports into investments in member countries.

Sánchez’s visits are paying off. Money is already flowing into Spain’s economy, particularly in the automotive sector. Battery giant CATL is investing €4.1 billion with French-Italian-American automaker Stellantis in a factory in Zaragoza. Chery is opening its first European plant outside Barcelona later this year.

Hungary is also a top destination for Chinese investments, and the need to stay in China’s good graces transcends political differences. On Sunday, voters ousted long-time pro-China Prime Minister Viktor Orbán, but his successor Péter Magyar isn’t changing track.

China is “one of the most important, largest, and strongest countries in the world,” Magyar said on Monday. “I am very happy to travel to Beijing, and we are very happy to welcome Chinese leaders here in Hungary.”

Brussels takes action

The Commission is not blind to the industrial challenges posed by the surge in imports, but previous trade actions to curb the practice — time-consuming individual investigations into state subsidies — have done little to turn the tide.

The executive is now hoping to target China by casting a wider net. One example is the recently proposed Cybersecurity Act, which seeks to reduce exposure to high-risk vendors like Chinese telecoms giant Huawei.

Its most muscular attempt to control Chinese investments is the Industrial Accelerator Act, the executive’s masterplan to revive EU industry.

The IAA in its current form sets local content requirements, restricts foreign direct investments and would require large deals in key sectors to be structured as joint ventures, an effort to ensure that investments from countries like China also transfer tech to Europe.

The Berlaymont’s hawkish trade department is working on more sweeping measures to protect entire sectors against foreign industrial overcapacity. A first proposal could come this summer.

The Commission hopes the size of the EU’s single market of 27 countries makes it a formidable enough opponent to force China to think twice before retaliating.

That hasn’t scared off Beijing in the past.

Countries that have gone against Chinese interests have found themselves feeling the brunt of Beijing’s retribution.

After EU capitals narrowly backed import duties on made-in-China electric vehicles, France, viewed as the prime mover, was hit with Chinese duties on dairy products and cognac.

In 2021, Lithuania allowed Taiwan to open a representative office in its capital Vilnius and was hit with a Chinese boycott. A chastened Lithuanian Prime Minister Inga Ruginiene now says her country had “jumped in front of a train and lost” by allowing the representative office and was open to renaming it to assuage Beijing.

Fear of China mixed with the need for Chinese investments makes it difficult for the bloc’s countries to form a unified front.

“We are not a unitary country, we are 27, and if we want to stand up to the problem of China, we have to stand up, preferably, as 27,” Joanna Szychowska, the Commission trade department’s director for Asia, said at a conference earlier this year. “It doesn’t always happen.”

Making the task even trickier is the shift in European perceptions of the U.S., which have soured under Trump. Beijing, meanwhile, has tried to present itself as a reliable partner and a guarantor of the international system.

A POLITICO European Pulse survey of six major EU countries found that 29 percent of those surveyed saw China as a threat, while 36 percent felt the same about the U.S. However, China was seen as a competitor by 43 percent, while the U.S. was viewed as a competitor by 24 percent.

“The U.S. has pushed itself into a situation where the Chinese can lean back and wait,” said one EU diplomat, who was granted anonymity to speak candidly. “They are not reliable partners anymore and are not doing reasonable, predictable politics. The Chinese are waiting for their time to really step in and fill that gap.”

Divisions over China are also present in the European Commission.

Industry Commissioner Stéphane Séjourné, the architect of the IAA, also acknowledged the need to keep doors open to China.

“We need it. We need foreign investment,” he said at a POLITICO event in Barcelona earlier last week.

Gill, the Commission spokesperson, called the relationship with China “one of the most strategically important and one of the most challenging we have at the same time.”

While the EU is divided over whether to treat China as a threat or an opportunity, leaders like Spain’s Sánchez are striking deals — and Beijing is gaining allies inside the bloc.

“Spain stands ready to play a constructive role in bridging differences between China and Europe in economy and trade, and building stronger China-Europe relations,” the Chinese foreign ministry said after Chinese Premier Li Qiang said Beijing will import more from Spain and encourage companies to invest more in the Mediterranean country.