23. 09. 2026
AUTHOR: Tristan Beucler
On 24 September, the European Union’s (EU) industry ministers will meet for a Competitiveness Council in Brussels to discuss crucial industrial files, including the Chips Act, the European Competitiveness Fund, and the Industrial Accelerator Act. For the latter, this Council will open the final stretch of negotiations, which are planned to end in December.
At a pivotal moment for the EU’s industry as it faces a second China shock, and as the continent risks losing 300,000 industrial jobs before the end of the year, this Council will be a crucial step for national governments to craft a deal on industrial policy. The EU’s most strategic industries are suffering from unfair international competition, and specifically from Chinese overcapacity imports. The EU has a daily trade deficit of €1 billion with China, and its consequences are becoming increasingly evident in the industry. Germany’s industrial employment rate has fallen to a ten-year low, and car manufacturer Volkswagen announced plans to cut 100,000 jobs and end production in several sites in Germany. In traditional export markets for the EU’s strategic industrial sectors, such as automotive and machinery, European companies are increasingly priced out by subsidised Chinese overcapacity.
Will Ministers follow Commission President Ursula von der Leyen’s words and “use all tools at [their] disposal” to change the tide of deindustrialisation?
Mitigating the China shock with European demand
It is essential for the EU to use the power of its internal market to support its industries and mitigate the impact of Chinese overcapacity. The Industrial Accelerator Act can do this if designed properly. By creating lead markets for strategic technologies and materials made in Europe when public procurement and other forms of public support are involved, this Act can create predictable demand for EU-made products and materials. But it will need to limit the risk of circumvention by ensuring a clear geographical scope for this policy, and to create a large enough market to incentivise investments into European value chains.
The Commission proposal centres on a definition of Made-in-Europe which includes all countries with which the EU has signed a free trade agreement or that are signatories to the Agreement on Government Procurement. This could be a costly political mistake. A stricter definition, with the option to add partner countries that treat EU companies reciprocally and pose no risk to the EU’s economy, would greatly reinforce the Act. A broader definition opens the door to circumvention – a strategy that is already underway for China, which invested massively into the EU’s neighbouring countries, such as Morocco or Serbia. Inversely, a stricter geographical scope creates a real incentive for balanced joint ventures in Europe, much like existing projects such as the Geely-Ford plant in Valencia, or the Orano-XTC New Energy one in Dunkirk. It can be the foundation for a more solid technological partnership with Chinese companies, offering access to the EU’s public support while ensuring benefits for the European economy.
Delivering an Act that has received wide-ranging support
Ahead of a year that will see many European citizens go to the polls, and in the midst of an industrial crisis, the Council of the European Union will be instrumental in delivering a strong Industrial Accelerator Act that supports the EU’s industry. Such an Act has been called for by many industrial sectors, from steelmakers to cement producers, cleantech scaleups, and car manufacturers. Its objectives have received support from a majority of national governments, as well as Members of the European Parliament across parties. The European Parliament’s draft report calls for increased ambition and a stricter geographical scope to ensure impact. This Act has been in the making for a long time, and its measures are crucial for the EU’s industrial competitiveness. Now is the time to start the final push to get it across the finish line by the end of the year.
