EU too slow to act as China rewrites global trade rules, trade chief Sefcovic warns

South China Morning Post  By Finbarr Berminghamin Brussels Published 25 Feb 2026

Commissioner calls for faster trade probes and WTO reform as Brussels confronts overcapacity, subsidies and a US$424 billion deficit. The European Union’s trade chief Maros Sefcovic has railed against the bloc’s glacial trade defences, warning that years-long probes and rigid rules will not protect the bloc from China’s increasingly fierce export machine. Speaking in the European Parliament on Tuesday, Sefcovic lashed out at Beijing’s “unsustainable” trade surplus and called for an urgent overhaul of world trading rules to account for “overcapacities”, “unfair trade policies” and “state subsidies”.

He confirmed, meanwhile, that the commission was “monitoring very closely the increase of plug-in hybrid Chinese vehicles” to the EU. “Last year the deficit with China was €360 billion [US$424 billion] … clearly this is not sustainable in the medium to long-term,” the commissioner said, pointing to an International Monetary Fund study which showed that 4 per cent of Chinese gross domestic product is used for “different kinds of state subsidies”. “We have well over 200 cases where we are using trade defence investigations. But here I also would like to say that in the framework for our economic security discussions....we have to look at how we can speed up the process,” Sefcovic added. An average trade probe can take “more than a year” and often relies on an official complaint from a company. The process “takes a lot of time and often misses the opportunity to act when it’s really needed”, the Slovak official said. Balancing trade and economic rivalry: the future of Sino-German relations. His intervention – in front of the parliament’s trade committee – comes at a moment of soul-searching in Brussels. An existential debate continues over how the EU should exist in a world in which rules can appear optional for major superpowers. Late last year, it launched a new communication on economic security, designed to turbo-boost its trade actions and link them to industrial and security policy objectives. In January, meanwhile, the bloc circulated a note at the World Trade Organization (WTO) pitching the idea that most favoured nation (MFN) principles that are the typical terms under which members trade with each other should be earned rather than automatic. Alongside that, Sefcovic published a Financial Times column urging the same, which he said “brought a lot of attention”. “It was our intention, because we wanted to start honest debate about what we need to change in the WTO,” he said on Tuesday. “There is one underlying cause for most of it, and these are global overcapacities. These are unfair trade policies. These are state subsidies,” he told the committee. “These are different non-transparent interventions from state level, and it has a dramatic impact on trade. So the MFN agreed 30 years ago, based on the principles that we are open, and we will be trading on the level playing field, the conditions are not there any more,” Sefcovic added. The official said he will raise the topics with Chinese trade minister Wang Wentao, whom he is set to meet at the World Trade Organisation’s Ministerial Conference in Cameroon next month. Alongside the deficit, he will raise market access for EU firms and Beijing’s rare earth export controls, he said. “We continue to engage with the Chinese side, and here, too, I am in constant touch with my counterpart, Minister Wang. We are currently discussing prospects for high-level engagement this year, while keeping in mind that any such engagement should be results-driven,” Sefcovic continued. While there has been a lower level of engagement between Brussels and Beijing in recent months, trade and competition probes continue to be launched at a quickening rate. A proposed Industrial Accelerator Act – set to be unveiled next week – would introduce local content requirements of up to 70 per cent for public procurement in strategic EU sectors, including electric vehicles, effectively creating a de facto “buy European” preference for state-funded contracts. Investigations into wind turbines, Chinese fast-fashion company Shein and laws targeting telecoms giants Huawei and ZTE have arrived this year already. Meanwhile, German manufacturers of heat pumps have been nervously eyeing the rapid development of China’s industry, which they say is advancing through state support, economies of scale and aggressive export strategies. The commissioner was peppered with lawmakers’ questions about the trade deal with the United States, controversially agreed last summer. The parliament has paused its ratification process in light of a US Supreme Court ruling that President Donald Trump’s tariffs were illegal, and his subsequent move to slap a 15 per cent base tariff on global imports.  Sefcovic urged the committee to resume its ratification work with a vote next month and vigorously defended the deal signed with Trump on his Turnberry golf club in Scotland last July. “I know many of you didn’t like the deal, but to be honest I never heard any alternative solutions from your side. What was the choice? To have this deal or go to trade war in August,” Sefcovic said. “Would you be praising me if I told you in August that negotiations failed, we are entering a trade war? Would you be happy if you saw that factories are closed, jobs are lost, and we have a dramatic turn for the worse in our relationship with the United States?” He also revealed that his interactions with Washington helped unlock the Nexperia chip crisis that hit Europe last year. After a meeting in Busan in November, Beijing lifted its export controls on finished Nexperia semiconductors from the country, which had been imposed following the Dutch government’s effective seizure of the Chinese-owned company’s operations. “The picture is not black and white. When we had the crisis with legacy chips last autumn, I was speaking with [US Treasury chief] Scott Bessant three times a day until the problem was solved,” Sefcovic explained. “I was asking him, once you will be talking to your Chinese counterpart, bear in mind that on this one, the supply chains are transatlantic, and they did it.”