EU faces 300,000 factory job cuts as China ‘colonises’ supply chains, industry warns

Job losses in EU manufacturing will rapidly increase unless Brussels stops the “colonisation” of industry by Chinese component manufacturers, a leading industry trade body has warned.

Eurometal predicts 300,000 job losses in manufacturing in the rest of 2026 because of expanding competition from China, which is now enjoying a record €1bn-a-day trade surplus with the bloc.

On Monday, Eurometal will bring its concerns to decision-makers in Brussels, staging a protest using 10 symbolic coffins in a procession around the European Commission headquarters.

The coffins will be marked with phrases such as “EU competitiveness”, “industrial jobs” and “European factories”.

European manufacturers fear that the commission is not fully alive to the cannibalisation of their industries as China becomes embedded in supply chains through the sale of components.

Alexander Julius, the president of Eurometal, told the Guardian: “China has made no secret of what it is doing. It is in their five-year plan.

“China doesn’t want to be a raw material supplier, it wants to be a finished product supply. They want to be in key product supply chains because they know that once they control the supply chain, they own the complete value chain.” He wants the commission to understand fully the impact of Chinese exports at component level, including metals and chemicals used in 90% of manufacturing.

The EU has already taken action on electric vehicles by imposing tariffs on Chinese imports in 2024, and in June introduced higher tariffs on imports of foreign steel. The bloc’s trade commissioner, Maroš Šefčovič, has also said the EU’s €360bn (£310bn) annual import/export imbalance with China is “not sustainable”, with both sides agreeing to hold three months of talks, ending in October, to try to avert a trade war.

“You look at the job losses stacking up in industries in places like Germany. The media, the politicians can see the consequences, but they don’t go after the virus that is causing it,” Julius said. “They don’t see why it is happening or ask why companies are either relocating to China or India or going bust.”

Among the conditions allowing the “virus” to spread is the increasing costs borne by European metal manufacturers with tariffs on steel imports and carbon emissions taxes for those high-energy sectors.

Components manufactured in China face none of those levies, said Julius, and that, combined with the undervaluation of the Chinese currency, the yuan, makes it challenging to compete with Chinese rivals, he added.

Companies have to satisfy shareholders and will continue to buy from China, whatever the political rhetoric coming out of Brussels, he said.

“When manufacturing leaves Europe, Europe not only loses production but investment, knowhow and long-term economic resilience,” Eurometal said ahead of the protest.

Analysis by the European Commission in June projected potential job losses of more than 1m on the back of high energy costs and global competition, which will include the 100,000 job cuts at Volkswagen confirmed by the German carmaker last week.

China has repeatedly accused Europe of protectionism. It threatened “resolute countermeasures should the EU further target Chinese companies or products”, according to the state-owned Xinhua agency earlier this year. Since then, the EU and China have agreed a three-month truce.