China Fires Back at EU's 'Made in Europe' Plan

Jan de Vries · 2026-04-27

China has officially threatened countermeasures against the European Union's new "Made in Europe" industrial strategy. This move signals rising tensions between two of the world's largest economies. The EU's plan aims to boost domestic manufacturing and reduce reliance on Chinese imports, especially in green tech and critical raw materials. But Beijing isn't taking it lying down. ### Why the EU's Plan Matters for Startups If you're building a startup in Europe, this policy shift could change your supply chain. The "Made in Europe" push means more incentives for local production. Think tax breaks, faster permits, and grant funding for factories within the EU. For hardware or deep-tech founders, that could mean cheaper components sourced from European suppliers. But it also means higher tariffs on Chinese goods, which might raise your costs in the short term.  ### China's Countermeasures: What to Expect Beijing hasn't detailed its exact steps yet, but history gives us clues. China could: - Impose tariffs on European luxury cars and agricultural products - Restrict exports of rare earth metals used in electronics - Slow down approvals for European companies operating in China - Launch anti-dumping investigations into EU goods These moves would hurt European exporters, but they'd also disrupt global supply chains. For a startup relying on Chinese parts, that's a real headache. ### How This Affects Your Incorporation Plans If you're thinking about incorporating in the EU, this trade spat adds uncertainty. Here's the thing: the EU wants to attract innovative companies, especially in clean energy and AI. The "Made in Europe" plan includes a proposed 28th legal regime for startups, which would simplify cross-border operations. But trade tensions could slow that down. What should you do? - Diversify suppliers now. Don't bet everything on one country. - Watch EU trade policy closely. If tariffs rise, adjust your budget. - Consider incorporating in a country with strong trade agreements, like the Netherlands or Ireland. ### A Real-World Example Take a Dutch EV battery startup. They source lithium from China and sell to German carmakers. Under the new plan, they'd pay more for Chinese lithium but get a subsidy for using European suppliers. The net effect? Their margins might shrink by 5-10% initially. But over time, they could benefit from a more stable, local supply chain. ### The Bigger Picture This isn't just about trade. It's about Europe trying to reclaim its industrial independence. For decades, the EU relied on cheap Chinese manufacturing. Now, with geopolitical tensions rising and green tech booming, they want to build their own capacity. That shift creates opportunities and risks for founders. - **Opportunity:** Grants and tax breaks for local manufacturing - **Risk:** Higher input costs and supply chain disruptions ### What's Next? Expect more back-and-forth in the coming months. The EU will likely push forward with "Made in Europe" regardless, but they may offer concessions to avoid a full-blown trade war. For startups, the key is to stay agile. Don't lock into long-term contracts with single suppliers. Build flexibility into your business model. Remember, trade disputes like this one often create winners and losers. The winners are those who adapt fast. So keep an eye on policy updates, talk to your supply chain partners, and plan for multiple scenarios. That's how you turn a geopolitical headache into a competitive edge.