With the end of the year approaching, the European Commission is rapidly ramping up its de-risking efforts through investigations against Chinese firms – even as France and Germany appear to be moving in different directions on China. Foreign subsidy regulation probes were launched last week against online retailer Temu and Nuctech, a maker of airport scanning equipment. Temu saw its Dublin headquarters raided by investigators looking for evidence of subsidies that distort the EU’s single market. This mirrored the Commission’s dramatic raid of Nuctech’s EU offices last year. The Commission announced it had deepened its probe into Nuctech. Meanwhile, negotiators from the European Council – made up of the 27 member states – and the European Parliament agreed on new rules that will make it mandatory to screen inbound investments in dual-use or military sectors. While China is not named in the legislation, its take-over of important European assets inspired the original screening laws. The upgraded rules – to kick in after 18 months – will now make it compulsory to screen foreign bids for firms making sensitive technology such as AI, quantum computing and semiconductors, or in critical raw materials and infrastructure. Bids emanating from local subsidiaries of foreign buyers will also be reviewed.
The pace of anti-dumping probes is also picking up towards year-end, as trade officials work to clear a long backlog of complaints that has left them thinly spread. Recently launched investigations into robot lawnmowers, welding wire and thermal paper may not be the last of 2025. “Threat detection systems, including security and inspection scanners used at ports and airports, play an essential role in ensuring that Europe is open, yet secure,” said the EU’s Competition Commissioner, Teresa Ribera, of the probe into Nuctech. The in-depth probe into the security scanning firm once run by former Chinese President Hu Jintao’s son builds on preliminary investigations conducted last year. These were launched with spectacular dawn raids of Nuctech’s Dutch and Polish premises. The company subsequently sued the Commission for reputational damages, but the case was thrown out by the EU’s General Court.
Meanwhile, France and Germany are moving in opposite directions. France has been a strong proponent of a muscular EU trade policy towards China, with President Emmanuel Macron warning U.S.-style tariffs could be on the way following his return from a visit to China. “I told them that if they do not react, we Europeans will be forced, in the next several months, to take strong measures and to de-cooperate, following the example of the United States – for instance, by imposing tariffs on Chinese products,” Macron told Les Echos. The sentiment was not shared, however, by German Foreign Minister Johann Wadephul who went to China Last week and cautioned against tariffs. “I would say that such measures should only be considered as a last resort and we should be extremely cautious because once you get into such a cycle, there is usually a ping-pong effect or a spiral with further counter-reactions and this only harms free trade,” Wadephul said. The polarity between the EU’s two most powerful member states is deepening the incoherence of its China strategy, away from Brussels’ preferred hard line, the South China Morning Post reports.
