EU battles Chinese trade circumvention through Morocco and Turkey

A surge of inexpensive Chinese products has entered the European Union (EU) despite anti-subsidy duties on Chinese electric vehicles (EVs) imposed in 2024. Beijing is now exploiting tariff-free trade agreements that the EU has with Morocco and a customs union with Turkey. By establishing factories and supply chains in these neighbouring markets, Chinese firms can ship goods to the EU under “Made in Europe” rules, sidestepping duties that target direct Chinese imports. The European Commission began negotiations with China in June 2024 to address the imbalance that has left the bloc with a €1 billion trade deficit, and it has signalled a deadline in October for any agreement.

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• Over the past four years, Chinese investment has reached $6 billion in Morocco and $2 billion in Turkey (Rhodium Group).

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• These “gateway” investments represent about a quarter of China’s total investment in Europe and the Maghreb (Thomas Grjebine, French Centre for Research and Expertise on the World Economy).

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• In 2020 the EU imposed anti-dumping and anti-subsidy duties on Chinese glass fibre; similar measures were extended to imports from Morocco and Turkey after investigations revealed circumvention.

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• In 2025 the Commission levied countervailing duties on aluminium road wheels made in Morocco, concluding that Chinese subsidies violated EU rules.

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Trade Commissioner Maroš Šefcovic has warned that the EU will deploy new unilateral trade-defence tools if China continues to bypass tariffs. The Commission’s Industrial Accelerator Act (IAA), proposed in March 2025, seeks to give preferential access to public procurement and EU funding only to “trusted partners,” a move that has provoked strong reactions from Chinese officials. French socialist MEP Pierre Jouvet and colleagues Christophe Grudler (French liberal) and Anna Cavazzini (German Green) are lobbying to exclude Morocco and Turkey from the IAA unless those markets open their public procurement to EU firms.

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• “There is a genuine long-term trend that began after COVID-19. We are seeing Chinese companies setting up operations in the country to manufacture high-value-added goods,” — Armand Meyer, expert at Rhodium Group

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• “The idea was to build a mega-factory in exchange for an exemption from Turkish import duties, as Turkey imposes tariffs on Chinese electric vehicles,” — Armand Meyer, expert at Rhodium Group

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• “For years, it was mostly a matter of transhipment through these countries, with Chinese exporters simply changing the certificate of origin, but defending the EU market has now become far more challenging,” — Laurent Ruessmann, partner at RB Legal

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• “In those cases, the Commission can no longer rely on anti-circumvention rules and has to launch a fresh investigation. The challenge is that it is much more difficult to prove dumping or unfair subsidies, making it far harder to impose duties high enough to protect the European market,” — Victor Crochet, lawyer at Nishimura & Asahi

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• “The Commission will have to come up with new instruments. It will try to push the boundaries of the concept of circumvention to keep pace with the times, even when the raw materials no longer come from China,” — Victor Crochet, lawyer at Nishimura & Asahi

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