The European Union's response to the "Chinese Challenge". Between "made in Europe" and strategic dependency.

Mots-clés:

Résumé:

Towards a more circular economy in an increasing finite world: levers and obstacles in the global automotive industry.

34th International Colloquium of Gerpisa, Campus Condorcet, 15-18 June 2026, Aubervilliers.

The European Union's response to the "Chinese Challenge". Between "made in Europe" and strategic dependency.

Bruno Jetin, Sorbonne Paris Nord University, Crisis Analysis and Transitions Laboratory, (ACT).

Abstract.

The hyperglobalization of the years 1990-2008 led to a multipolar world increasingly fragmented by geopolitical divisions (Fernández-Villaverde et al., 2024) (Hakobyan et al., 2023). These geopolitical fragmentations are leading to a resurgence of protectionism and a restructuring of global value chains, which are forced to take into account the injunctions and trade restrictions decided by the major powers taking part in the conflict (Jetin, 2023). They are also putting the European Union to the test. The European Union has built its project on the basis of a single market open to foreign competition in order to attract foreign investment that stimulates competition and competitiveness. This blind belief in the virtues of multilateral free trade has long blocked any industrial policy aimed at promoting the production of European products in Europe by European companies, which can be summed up by the "made in Europe" label. The only measures resembling an industrial policy concerned scientific research through European calls for tenders intended to make European companies more competitive in a competitive market.

Geopolitical fragmentation and the rise of protectionism have strongly questioned this project, making the European Union appear to be the last defender of free trade that the other major powers no longer respected. In response, the European Union has very recently begun to gradually amend certain aspects of its institutional architecture, moving in the direction of more protectionism, possibilities for Member States to grant more subsidies to the private sector, and by supporting the production in Europe of certain products deemed strategic.

The European automotive industry has been the big beneficiary of these developments, particularly in the field of electric vehicles. Having decided too late to engage in the energy transition and the production of electric vehicles, the European Union discovered that it was unable to mass-produce electric batteries, and was dependent on Chinese, Japanese and Korean manufacturers. Worse, subsidies for the purchase of an electric vehicle granted by the Member States have most often benefited Asian battery producers. The European Union has also imposed tariffs on Chinese electric cars, which has slowed their progress on the European market but has also encouraged some Chinese car manufacturers to invest to produce in Europe. Finally, the support granted to European battery producers has met with mixed success. Several of them went bankrupt after being unable to produce the batteries for European cars on a large scale and on time. European battery producers still in operation have had to rely on Chinese producers in various forms to try to overcome their difficulties. You don't acquire the experience and know-how accumulated by Asian battery producers over several decades in two or three years.

Our paper aims to take stock of European policy in the field of electric battery production. In the first part, we will estimate the evolution during the recent period of dependence on imports, raw and processed ores, components and batteries. To do so, we will rely on the methodology used in a previous article (Jetin, 2023)which will be updated. We will also estimate the production of batteries carried out by gigafactories on European soil, which we will compare with imports in order to have an idea of the market share of European producers of electric batteries. In the second part, we will study the European Union's trade policy. Of particular interest are the trade agreements recently signed by the European Union (or planned) where the automotive industry and the supply of critical minerals are often the subject of particular attention. The analysis of these agreements will make it possible to assess the extent to which the European Union is really trying to reduce its dependence on foreign countries. We will also study the latest directives adopted by the European Union and its Member States in the direction of a "made in Europe" in the automotive sector.

Our conclusion will be to verify whether the European Union has made progress towards greater "strategic autonomy" in the field of electric vehicles. The question is not obvious because European car manufacturers have different strategies when it comes to electric vehicles, but they all have one thing in common. Economic nationalism, the "made in Europe" is not an objective that European carmakers set for themselves. What they want to preserve above all is the right to "do business" with the companies they want. Whether these are European or Asian does not matter. Several European car manufacturers have established partnerships of various kinds with Chinese companies, and in this perspective defend the principle of a single market open to the world and not protected. European protectionism, to the extent that it exists, therefore oscillates between the protection of national or regional interests and the protection of the interests of private companies, which are not necessarily the same.

References

Fernández-Villaverde, J., Mineyama, T., & Song, D. (2024). Are we fragmented yet? Measuring geopolitical fragmentation and its causal effect (NBER Working Paper, Issue 32638).

Hakobyan, S., Zymek, R., & Meleshchuk, S. (2023). Divided we fall: Differential exposure to geopolitical fragmentation in trade.

Jetin, B. (2023). Electric batteries and critical materials dependency: a geopolitical analysis of the USA and the European Union. International Journal of Automotive Technology and Management, 23(4). https://doi.org/10.1504/ijatm.2023.1005931