Macron warns China tariffs possible over widening trade surplus

President Emmanuel Macron told the French daily Les Echos that during his state visit to China he warned Beijing that Europe could be forced to impose tariffs if China does not act to reduce a rapidly widening goods trade surplus. Macron said China’s large surplus is “unsustainable” and said China has been “killing its own customers” by importing less from Europe, comments that underline mounting frustration in Paris and Brussels over shifting trade patterns.

Macron proposed reciprocal steps to ease tensions, urging Beijing to limit rare earth and steel export curbs while offering to dismantle some export controls on high end semiconductor machinery from Europe. The package he outlined attempts to link trade rebalancing with technology and investment bargaining, a strategy intended to deliver both immediate relief for exporters and longer term commitments to European jobs and value creation.

The president’s remarks come amid a broader alignment between France and other EU capitals and follow transatlantic concerns about China’s trade practices. European officials have increasingly flagged the asymmetry in goods flows, where Chinese exports to the bloc have continued to grow while Chinese imports from Europe have lagged. That imbalance has fed political pressure in industrial regions in France, Germany and Italy where exporters and workers are vocal about lost market access and weakened demand.

Economists say tariffs would be a blunt instrument. Tariffs can protect short term industrial output but risk higher consumer prices and retaliatory measures that could hit key European sectors such as automotive parts, aerospace components and machinery where integrated supply chains link firms across continents. Markets reacted to the interview with cautious selling of shares in some export oriented industrial companies and a modest rally in stocks tied to domestic demand, reflecting investor concern about trade policy uncertainty.

Macron’s suggestion to ease European export controls on advanced semiconductor equipment is politically sensitive. Since 2022, Western allies have tightened controls on the flow of cutting edge chipmaking tools to China out of national security concerns. Reversing or relaxing some measures would require coordinated decisions at EU level and reassurance that technology transfers will not erode strategic advantages.

At the same time China’s use of selective export curbs on strategic materials and industries has become a bargaining lever in diplomacy. Limiting curbs on rare earths and steel would help European manufacturers that rely on those inputs and reduce the leverage Beijing holds over strategic supply chains. Securing such commitments could, in turn, be linked to more transparent and employment focused Chinese investment in Europe, a demand Macron highlighted.

Brussels faces a complex calculus. Policymakers must weigh the economic costs of tariffs and countermeasures against political imperatives to defend industrial capacity and jobs. The episode is likely to intensify negotiations between the EU and China in the coming months and could add a new front to ongoing US EU and Chinese trade frictions, shaping the evolution of global supply chains and investment patterns into 2026.