Allied trade war against China hardens as EU antidumping cases rise sevenfold and Mexico imposes 25% tariff
The US-led effort to counter China's export dominance has hardened into a multi-front allied trade conflict: the EU is running 50 ongoing antidumping cases against Chinese goods — up from 7 in 2024 — and Mexico has imposed tariffs of up to 25% on Chinese imports, while the WTO counts more than 300 antidumping investigations since 2020 by low- and middle-income countries. China, which accounts for roughly 30% of global manufacturing output and more than 50% of global exports in hundreds of product categories, has used rare-earth supply restrictions to retaliate against Japan, the Netherlands, and the US, and is expected to extend that leverage as the conflict deepens.
China now accounts for roughly 30% of global manufacturing output, up from about 5% in 1995, and its share of global manufacturing exports rose from 3% to 20% over the same period. The country supplies more than 50% of the global exports of hundreds of manufacturing products; its current account surplus stands at 3.8% of GDP officially, and up to 5% by some analysts. That concentration has made China the target of coordinated counter-pressure from governments across the developed and developing world, and the resulting conflict is now expected to be structural rather than episodic.
The European Union is running 50 ongoing antidumping cases against Chinese goods, up from 7 in 2024, according to Cecilia Malmström of the Peterson Institute for International Economics. Brussels has already imposed duties or tariffs on Chinese electric vehicles, solar supply chains, glass fibers, and steel cylinders. Mexico, partly at Washington's behest, has imposed a tariff of up to 25% on imports from countries with which it holds no trade agreement — a measure directly targeting China. The World Trade Organization reports more than 300 antidumping investigations launched since 2020 by low- and middle-income countries against Chinese exports.
Beijing has demonstrated a clear willingness to use supply-chain leverage as a coercive instrument. In 2010, it cut rare-earth exports to Japan after the Japanese coast guard detained the captain of a Chinese fishing trawler near disputed islands. Earlier this year it curtailed supplies of magnets and minerals to Tokyo following Japanese statements on Taiwan. In the Netherlands, Beijing blocked chip exports from Nexperia's Dongguan plant after the Dutch government moved to take over the firm. More recently it tightened restrictions on rare-earth and magnet exports in response to Trump's tariff pressure — components critical to fighter jets, submarines, mobile phones, and electric vehicles.
Xi Jinping stated Beijing's industrial strategy explicitly in a 2020 speech: China must "tighten international production chains' dependence on China, forming a powerful countermeasure and deterrent capability against foreigners who would artificially cut off supply." Trade economist Chad Bown, co-author of "How to Win a Trade War," characterises the outcome: "Their goal was to acquire market power." Jason Furman, who chaired the US Council of Economic Advisers under President Obama, argues that Beijing's approach points to an objective of "maximising geopolitical dominance; not the economic welfare of its citizens."
Building alternative supply chains faces structural constraints. Developing new sources of rare-earth magnets will take years, and China could retaliate by cutting existing supplies to any country that tries. Countries such as Indonesia, which holds vast nickel reserves, maintain close economic ties to Beijing that constrain independent alignment with the US-led coalition. The EU finalised its long-deferred Mercosur trade agreement; China and ASEAN deepened their trade framework; Canada's Prime Minister Mark Carney travelled to Beijing in search of alternatives to US access. On June 5, US economic strategists circulated proposals for further escalation against China, the second consecutive day of allied policy coordination on the trade-war framework.