.svg){kind=logo}
The European Union is increasingly turning toward protectionist policies as it seeks to shield its struggling industries from global economic pressures. However, a growing number of member states are warning that a “Buy Europe” strategy could undermine free trade, disrupt supply chains, and backfire within the single market.
From Free Trade Champion to Defensive Posture
For decades, the EU positioned itself as one of the world’s strongest advocates of open markets. That stance is now under strain. Rising US tariffs on European goods and a surge of low-cost Chinese imports have prompted Brussels to reconsider its trade approach.
Over the past year, the bloc has tightened steel safeguards, proposed stricter “made-in-Europe” rules for defence procurement, imposed import quotas on ferro-alloys, and explored using revenues from an upcoming carbon levy to support European exporters. EU officials increasingly argue that traditional free-trade policies no longer offer sufficient protection in a rapidly changing global economy.
This shift echoes earlier tensions. In 2018, when the United States first threatened tariffs on European steel and aluminium, then-European Commission President Jean-Claude Juncker warned that retaliatory measures could hurt all sides. Less than a decade later, Europe itself is now leaning toward similar defensive tools.
Pushback From Within the EU
The move toward protectionism has met resistance from a coalition of member states led by Czechia and supported by Nordic and Baltic countries. These governments recently blocked proposals that would have made it harder for companies to use non-EU components in manufacturing.
As a result, the European Commission postponed the launch of its proposed Industry Accelerator Act, a strategy aimed at boosting demand for EU-made strategic technologies such as electric vehicles and batteries through local-content requirements.
Critics argue that such measures risk fragmenting the single market and violating international trade commitments. A position paper signed by Estonia, Finland, Ireland, Latvia, Malta, Portugal, Sweden, Slovakia, and Czechia warned that aggressive “made in Europe” preferences could disrupt supply chains, distort competition, and weaken research and innovation cooperation.
A Divided View on Europe’s Trade Future
Supporters of stronger trade defences argue that Europe has been overly exposed in a global economy shaped by geopolitical rivalry and industrial overcapacity. China’s global goods surplus exceeded $1 trillion in 2024, with Europe accounting for more than €300 billion—surpassing China’s trade imbalance with the United States for the first time.
Meanwhile, the US economy has shown limited visible damage from its tariff policies, intensifying pressure on Europe to respond more assertively.
Risks to Global Trade Partnerships
Trade experts caution that strict local-content rules could weaken Europe’s ability to negotiate new trade agreements with partners such as Japan, South Korea, India, and Mercosur countries. They warn that breaching existing trade commitments could undermine the EU’s credibility and reduce access to global markets.
Germany as the Deciding Factor
Germany’s position may prove decisive. Historically a strong supporter of free trade, Germany exported more than 40 percent of its GDP in 2024. However, industrial decline, job losses, and political fragmentation are now reshaping the debate in Berlin.
Analysts argue that if protectionist sentiment gains momentum in Germany, it could mark a turning point for the EU’s long-standing liberal trade doctrine.
A Critical Moment for EU Trade Policy
The EU now faces a defining choice: balance industrial protection with international trade commitments or risk fragmenting its single market and global partnerships. As Brussels weighs its next steps, the outcome of this debate will shape Europe’s economic strategy for years to come.
December 23, 2025
