EU Climbs Escalation Ladder With Beijing, Plans Wider Curbs On Chinese Imports

What happened: The EU is preparing restrictions on imports of chemicals, furniture, and machinery from China, per Bloomberg, expanding efforts to shield domestic manufacturers. Brussels also aims to implement a Chinese hybrid vehicle cap in December. Key numbers: EU-China trade deficit stands at $404 billion. Why it matters: Nomura analysts expect elections across Europe over the next year and a half to shift right, and the import curbs suggest Brussels is scrambling for political survival. Climbing the escalation ladder risks Beijing restricting rare earth exports.

The EU is preparing restrictions on imports of chemicals, furniture, and machinery from China, per Bloomberg, expanding efforts to shield domestic manufacturers. Brussels also aims to implement a Chinese hybrid vehicle cap in December.

Nomura analysts expect elections across Europe over the next year and a half to shift right, and the import curbs suggest Brussels is scrambling for political survival. Climbing the escalation ladder risks Beijing restricting rare earth exports.