European authorities are advancing a probe into foreign brands that export goods from China to the European Union, including well-known names such as Tesla and other European manufacturers. The objective is to determine whether they have benefited from unfair support provided by the Chinese government. Valdis Dombrovskis, the European Commission’s vice-president for economy and trade, told the Financial Times that the investigation into illegal aid to China complements a broader effort announced by the EC President Ursula von der Leyen. The continent remains wary of China’s potential subsidies for electric vehicle production, which Brussels views as an unfair practice that undermines the EU market rules.
Subsidies that keep prices low help global commerce and create jobs in Europe. Yet competition should be fair. In her State of the Union address, von der Leyen emphasized that many European firms face exclusion from foreign markets or are harmed by predatory strategies. The automotive and energy sectors have faced similar pressures: numerous smaller companies have struggled against heavily subsidized Chinese rivals, with some ultimately unable to survive the market. A representative from Germany echoed these concerns, underscoring the need for a level playing field.
Von der Leyen affirmed that an investigation into Chinese subsidies is essential to prevent a repeat scenario in other strategic European sectors, notably electric vehicles. Clean-energy industries hold significant promise for Europe, but global markets are flooded with cheaper Chinese EVs whose prices are kept artificially low by substantial government backing. The consequence is a distortion of fair competition, an issue the European leadership has highlighted as a priority.
fair competition
In an FT interview, Dombrovskis pointed to signals strong enough to justify the inquiry. The focus extends beyond Chinese-made EVs and could include vehicles from brands like Tesla or Geely, which owns Volvo, if production subsidies are involved. The European stance is clear: open markets are welcome, but competition must be fair. The EU remains among the largest open markets for Chinese automotive products, even as other major economies impose tariffs on these imports.
Limit entry from “unrelated countries”
Against a backdrop of rising protectionism, Spain has proposed measures to shield the EU from strategic risks tied to foreign ownership or control of key European firms. The plan addresses concerns about ownership in critical sectors and infrastructure, with attention to recent discussions around foreign investment and influence. The ongoing dialogue includes the possibility of safeguarding European assets from states that do not share democratic values.
Drafts under consideration by the Spanish government call for careful scrutiny of foreign participation in European companies, especially in the digital and green sectors, where the Union sees national security implications. The aim is to reinforce oversight mechanisms and gradually reduce the influence of investors from countries with different political systems. The government is urging the EU to use existing tools, including supervisory arrangements for foreign direct investment, to protect European industries while keeping regulatory pathways open for strategic collaboration.