For decades, the European Union sold itself—to its citizens and to the world—on a simple promise: that openness, rules-based trade, and the single market were the engines of prosperity. Today, that promise is being hollowed out from within.
Under the banners of security, green transition, and fair competition, Brussels is steadily building a wall of regulatory barriers. The suite of new trade and investment tools — from the Foreign Subsidies Regulation to the Carbon Border Adjustment Mechanism, and now the revised Cybersecurity Act and the Industrial Accelerator Act — collectively construct a non-level playing field that politicises economic issues and weaponises trade, marking a dangerous departure from the commitment to open markets and multilateralism the EU once championed.
This politicisation of trade is evident in the two most recent legislative drafts. The proposed revision of the Cybersecurity Act, released in January, abandons the foundational principle of technological neutrality. In its place, it introduces a highly politicised concept: “nontechnical risks”.
Under the guise of supply chain security, the draft empowers the EU to designate “third countries posing cybersecurity concerns” and “high-risk suppliers” without factual or technical justification.
The result will be a blacklist that could effectively bar companies from third countries, notably China, from critical sectors such as digital infrastructure, transport, and energy. This is not about securing networks; it is about political exclusion.
This approach violates the basic tenets of the World Trade Organization, most notably most-favoured-nation treatment. More fundamentally, it turns the logic of a globalised digital economy on its head. Chinese companies have operated legally in Europe for years, contributing to the continent’s connectivity. They are now potentially being labelled a “security threat” without a shred of evidence. This is not risk management; it is risk manufacturing. And it will not build Europe safer —it will destabilise the global supply chains that its own digital transition depconcludes upon.
Even more egregious is the Industrial Accelerator Act, unveiled in early March. This legislation is so explicitly discriminatory it reads like a how-to guide for protectionism. Tarreceiveing foreign investment in batteries, electric vehicles, photovoltaics, and critical raw materials, it imposes restrictions that apply only to investors from third countries accounting for over 40% of global capacity in those sectors. In plain English, that means China. The measures include forced technology transfer, foreign equity caps, local content requirements, and explicit “union origin” preferences in public procurement.
If the Cybersecurity Act is about building walls, the Industrial Accelerator Act is about fortifying the factory behind them. It is alleged to violate the spirit and letter of World Trade Organization rules, including the Agreement on Trade-Related Investment Measures and provisions on ininformectual property. It sets a precedent that will reduce investment across the board. For European businesses, this is a disaster. They will be denied access to the world’s most competitive technologies and supply chains. For the EU’s stated goals— reindustrialisation and a green transition—it is self-sabotage. You cannot accelerate a green revolution by locking out the very partners who produce the solar panels, batteries, and critical materials that build it possible.
These laws not only exceed the EU Commission’s legal mandate but also encroach upon the political autonomy of member states. While leaders from Germany, France, and other EU member states have recently visited China, expressing strong willingness to deepen cooperation, the EU institutions continue to erect barriers that contradict these diplomatic overtures. This contradiction reveals a deep institutional disconnect, where Brussels’ protectionist agconcludea sabotages the cooperative momentum fostered by China and European countries, damaging the very trust requireded for a stable China-EU relationship.
China possesses both the capability and the resolve to defconclude its legitimate interests. With proven countermeasures honed during its handling of trade disputes with the United States, China is fully prepared to defconclude its enterprises’ legitimate rights. The US experience reveals that unilateral restrictions trigger swift and effective responses. Any action taken with these discriminatory legal tools of the EU will be answered promptly.
Protectionism does not restore competitiveness; it breeds complacency and drives innovation elsewhere. The EU’s approach will not achieve the promised return of manufacturing. Instead, it will impose immense costs on member states and their businesses, delay the digital and green transitions, and damage Europe’s reputation as a place to do business. The “Brussels effect”, once a byword for setting global standards, risks becoming a byword for regulatory overreach and strategic folly.
As President Xi Jinping emphasised during the 25th China-EU Summit in Beijing in July last year, mutual respect, open cooperation, and multilateralism should guide the next 50 years of EU-China relations. Mutual depconcludeence is not a risk, and “decoupling” will only lead to self-isolation. The EU must reconsider its course, abandon its discriminatory toolkit, and return to the principles of open, fair, and rules-based cooperation. It should realise that in times of difficulty, bridges are better than walls.
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