Europe is edging toward a trade war with China. Tariffs on electric vehicles are already in place. Import quotas and anti-dumping investigations are expanding. Brussels is nervous, and rightly so. China's export surplus with the EU has reached €360 billion, and European industry is feeling the pressure.
But before we further implement protectionism, we need to ask an honest question: are we solving the right problem? From our own work with Chinese clean energy companies establishing operations in Europe, the picture is more nuanced than the political debate suggests.
China Is Winning the Energy Transition. And That's Not Entirely Bad News
Here is a fact that gets lost in the political noise: China is the world's most advanced manufacturer of clean energy technology. Solar panels, EV batteries, wind turbines, heat pumps, grid infrastructure. China produces them at a scale and cost that no other country currently matches.
Europe made a strategic choice after the 2021 energy crisis. Facing dependency on Russian fossil fuels, we committed hard to the energy transition. Electric vehicles. Battery storage. Solar. That was the right call. But here is the uncomfortable truth that follows from it: a large share of the products we need to execute that transition come from China. And they are significantly cheaper than European alternatives.
A Chinese solar panel that costs half the price of a German one still produces the same clean electricity. A Chinese EV battery that makes electric cars affordable for middle-income households still takes a combustion engine off the road. The physics do not care about the country of origin.
Overcapacity or Competitive Advantage?
The EU's official position is that China's pricing reflects unfair state subsidies and overcapacity, not genuine efficiency. There is some truth to that. Chinese government support for strategic industries is real, well-documented, and substantial.
But Chinese economists like Guo Kai are making a different argument. They point out that a significant share of China's growing export surplus with Europe is driven not by unfair competition, but by the energy transition itself. Europe is importing the inputs for its own green economy. Solar panels, batteries, EV components. These are not luxury goods being dumped on our market. They are the buildigns blocks of the infrastructure Europe says it wants to build.
Calling that "overcapacity" misses the point. China invested early, scaled fast, and got good at making things Europe now urgently needs.
The Tariff Paradox
Here is the paradox of EU trade policy right now. We want to accelerate the energy transition. We also want to protect European industry. But in the short to medium term, those two goals are in tension.
Tariffs on Chinese EVs and solar panels do not make European alternatives appear overnight. They make the transition slower and more expensive. Households pay more for electric cars. Utility-scale solar projects become less viable. The green economy we promised our citizens gets pushed further down the road.
This does not mean Europe should accept unlimited Chinese imports with no conditions. Protecting strategic industrial capacity in sectors like batteries, semiconductors, and advanced manufacturing is a legitimate goal. Dependency on a single supplier for critical infrastructure is a real risk. China itself has demonstrated a willingness to restrict raw material exports when it suits Beijing's interests.
But there is a difference between smart industrial policy and a reflexive trade war driven by political pressure and fear.
What a Smarter Approach Looks Like
Europe needs to distinguish between two types of Chinese imports:
Category one: Products where European alternatives exist or can be built at scale within a realistic time horizon. Here, targeted tariffs and investment incentives make sense. Protect the runway, build the capacity, and phase out dependency over time.
Category two: Products where no credible European alternative exists on the short term, and where imports directly enable the energy transition. Here, protectionism has a cost that goes far beyond the balance of trade. Blocking or taxing these products slows decarbonization, raises costs for European businesses and consumers, and ultimately undermines the industrial competitiveness we claim to be protecting.
Solar panels and EV batteries are largely in this second category right now. Treating them the same as steel or ceramics is a policy error.
The Bigger Picture
Trade wars are not won. They are survived. Usually at significant cost to both sides and to the rules-based international trading system that small and mid-sized economies like the Netherlands depend on for their prosperity.
China is not going to stop being competitive in clean energy technology. It has invested too much, for too long, at too large a scale. The question for Europe is not how to reverse that reality, but how to respond to it intelligently.
That means investing aggressively in European clean tech capacity, with real money, not just political declarations. It means building supply chain resilience without sacrificing affordability. And it means being honest with European citizens that cheaper Chinese products, in some categories, are not a threat to our future. They are part of how we build it.
The energy transition is not optional. The planet's timeline does not negotiate. If cheaper Chinese solar panels and batteries help us get there faster and at lower cost, the strategic calculus needs to account for that. Even when it is politically uncomfortable.
Protecting European industry matters. But not at the cost of the future we are trying to build.
About The Author
Ben de Koe is Managing Director of PrimeBridge Global, a Netherlands-based corporate services firm helping US, UK, and Asian companies establish and run European operations.
