EU trade deficit with China prompts steel safeguards and EUR 3 fee on small parcels

The European Union introduced new steps on Wednesday to support its steel sector. The bloc also moved to curb a surge in small online parcels. Officials linked both measures to a widening trade gap with China. The EU’s trade deficit with China reached about 360 billion euros in 2025. It equals close to 1 billion euros each day.

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European Commission President Ursula von der Leyen backed a new 3 euro customs duty. The charge applies to many low-value deliveries. "Todays change is about restoring fairness for European businesses and better protecting our consumers,\" von der Leyen wrote online. \"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.\"

EU trade deficit with China and small parcels

From Wednesday, the EU removed the de minimis exemption for parcels under 150 euros. The Commission said Chinese firms Temu and Shien control about 90 per cent of this trade. The United States made a similar change last year. The EU also reported 5.9 billion small packages arrived in 2025. That compared with about 1.4 billion in 2022.

The Commission said these parcels total around 16 million a day. It said they make up 97 per cent of import traffic. Yet they equal only 2 per cent of import value. Officials said many items failed safety checks. The Commission also raised environmental worries over heavy plastic use. \"Europe finally shows teeth against flood of cheap package deals,\" said Bernd Lange online.

Some analysts said the 3 euro duty may not shift overall trade flows. Gary Ng, from the Central European Institute of Asian Studies, called it small. Ng said it is minimal beside the wider price gap. Ng added it could cut impulse buys and tiny orders. Yet customers and platforms could still combine orders in groups.

EU steel imports and China overcapacity

The Commission also announced tighter rules for steel imports. It said the goal is to protect EU plants and jobs. Brussels pointed to global overcapacity in a strategic industry. Critics often link the issue to China’s support for steel output. They say it pressures producers from Germany’s Ruhr valley to Kyushu Island in Japan.

The new rules set tariff-free quotas at 18.3 million metric tons each year. The Commission also set an out-of-quota duty of 50 per cent. The measures cover 26 types of steel imports. Importers must provide more detail on the \"melt and pour\" stage. The EU wants to stop rerouting via third countries.

The EU had already tightened steel tariffs in October. It said imports were being redirected by US trade policy under Trump. Europe’s steel industry is in crisis, industry groups said. The European Steel Association reported crude steel output hit a historic low in 2026. Trade group director-general Axel Eggert warned imports are taking a larger market share.

The EU imports most steel from partners, not from China directly. The main suppliers include the UK, Ukraine, India, Taiwan, Turkey, Japan and South Korea. Officials said the new tariffs could raise issues under some free trade agreements. Still, the EU granted some exemptions for Ukraine during the war with Russia. A Commission official said, \"We will remain open to engage - call it a club, call it an alliance, call it whatever you like - but the idea that we come together with like-minded partners on this global challenge of overcapacity in the market.\" The official added, \"In an ideal world there is fair competition and level playing fields. Unfortunately, we dont seem to live in an ideal world.\"

EU steel measures and China response

Alicia García-Herrero of Natixis said Beijing will resist the plan. She said, \"The Chinese do not want this instrument to work. This could be a springboard for more.\" She added, \"It opens the door to the overall overcapacity instruments to see how it works.\" China’s Ministry of Commerce warned the EU in May. It said China would firmly respond to discriminatory measures.

Chinese experts have also warned about backlash to mass exports. A Tsinghua University report listed \"China Shock 2.0\" as a key perceived risk. It described a surge of subsidised advanced exports entering global markets. The report said such moves could lead to more tariffs. It also warned others may follow the US and EU.

\"What makes this risk distinctive is that it does not originate from a single adversary. It is the wolf pack effect of multiple countries acting in concert, inflicting not only direct economic losses on China but, more profoundly, degrading its strategic environment and international business reputation,\" the report stated. Beijing rejected the idea. It said the trend brings shared gains from China’s tech progress.

EU trade deficit with China and diplomacy

HSBC economists Frederic Neumann and Justin Feng said Brussels is changing course. They wrote that the EU is less combative than the Trump administration. Yet they said the direction is shifting. They also noted a G7 call in June. Leaders urged independent supply chains for critical minerals for defence and high-tech sectors.

Guo Jiakun of China’s foreign ministry said on Tuesday, \"China and the EU are partners, not rivals,\" and added the EU’s problems are not rooted in China. Neumann and Feng said China endured Trump’s tariff threats last year. They said Beijing used rare earth control to reach a truce with Washington. They added a broad China-EU settlement looks limited soon.

García-Herrero said China values the EU market for key exports. She said 90 per cent of battery exports and 60 per cent of electrical vehicles exports go to the bloc. She also said Beijing believes it can weaken common EU action. \"China thinks Europe has no leverage,\" García-Herrero said. \"They do think they have the upper hand, by all means.\"

China’s Minister of Commerce Wang Wentao met EU trade representative Maroš Šefcovic in Brussels on Monday. After the meeting, Šefcovic said, \"The EU remains open for business but we need to defend our industrial base and keep pushing for a level playing field globally, so our industries get a fair shot at competing,\" and added, \"That is why todays talks – and the ones to follow – matter.\" Šefcovic has set an October deadline for progress. \"The status quo is not an option.\"

The EU measures now combine online parcel checks with stricter steel safeguards. Officials said both aim to protect jobs, consumers, and industry capacity. China has signalled opposition and warned of responses. EU leaders, meanwhile, have kept talks open through ongoing meetings. With an October deadline set by Šefcovic, the next months will focus on trade rebalancing steps.

With inputs from PTI