Brussels appears to be approaching a geopolitical turning point. Ahead of the EU summit on 18 June, political rhetoric towards China has noticeably hardened. At the centre of the debate are concerns that Chinese industrial overcapacity and persistently low export prices are distorting competition and placing Europe's economy under increasing strain. Policymakers fear that the impact could extend beyond individual sectors and threaten entire European value chains.
Political tensions continue to rise
The shift in political sentiment is reflected in increasingly direct statements from senior European politicians. Manfred Weber, President of the European People's Party (EPP) and Deputy Chairman of the CSU, has argued that Europe has reached a decisive moment in its relationship with China. According to Weber, the era of naivety is over, and Europe must now defend its economic interests firmly and consistently. He points to a trade deficit approaching €1 billion per day, warning that it poses a serious threat to Europe's industrial base and high-value employment. In his view, failure to respond risks allowing Chinese competition to displace strategically important European industries. Because access to the European Single Market remains highly valuable for China, Weber argues that the EU should use this leverage to secure fairer competitive conditions.
Relations between Europe and China have become increasingly strained. Tensions between French President Emmanuel Macron and Chinese President Xi Jinping have persisted for several months, while European policymakers continue to raise concerns about unfair competition and structural market distortions resulting from Chinese industrial policy. At the same time, the EU has already introduced tariffs on selected Chinese products, including electric vehicles, despite differing views among Member States. Further trade defence measures are now openly under discussion, reflecting concerns that existing instruments may not be sufficient.
Raw material dependence remains a strategic vulnerability
Another major concern is Europe's dependence on Chinese supplies of critical raw materials. Should China respond to increased trade pressure by restricting exports of strategically important materials such as rare earth elements, European industry could face significant disruption, particularly in sectors such as electronics, renewable energy and advanced manufacturing. Although the EU is working to diversify its supply chains through closer partnerships with countries including Canada, India and the Mercosur states, these relationships are unlikely to fully replace Chinese supply in the short term. As a result, dependence on global supply chains remains one of the key vulnerabilities of European industrial policy. Germany's position is also evolving. While its federal government has yet to define its long-term strategy, reports suggest that Chancellor Friedrich Merz is generally open to adopting a firmer approach towards China.
EPR: Building Europe's resource resilience
Against this backdrop, strengthening Europe's secondary raw materials market is becoming increasingly important. At the centre of this effort lies Extended Producer Responsibility (EPR). Long regarded as a mere compliance obligation, EPR is increasingly being recognised as an instrument of industrial policy. By encouraging producers to design products for recycling, improve collection systems and return valuable materials to the production cycle, EPR reduces reliance on primary raw materials and imported resources. Recycling is therefore no longer solely an environmental objective. It is becoming a strategic factor in ensuring security of supply, industrial competitiveness and geopolitical resilience. The systematic use of secondary raw materials is increasingly viewed as an essential component of a stronger and more self-sufficient European economy. Viewed from this perspective, EPR is evolving from a regulatory framework into a strategic policy instrument that can help reduce Europe's dependence on external sources of raw materials.
On one side, the geopolitical confrontation between the EU and China is intensifying, bringing with it the prospect of tariffs, countermeasures and supply disruptions. On the other hand, Europe is pursuing a long-term structural response centred on the circular economy, recycling and Extended Producer Responsibility. While the former is shaped by short-term geopolitical tensions, the latter aims to build long-term resilience, competitiveness and resource security. For manufacturers, producers and retailers, the direction of travel is becoming increasingly clear: Europe is seeking not only to strengthen its industrial base but also to secure more of its critical resources from within its own economy. Whether the combination of a firmer trade policy and a more circular economy will be sufficient to strengthen Europe's industrial competitiveness remains to be seen. What is clear, however, is that both are becoming increasingly important components of Europe's long-term industrial strategy.
More than regulatory compliance
Viewing Extended Producer Responsibility solely as an administrative burden overlooks its wider strategic value. Behind today's compliance obligations lies a recycling infrastructure that has been developed over several decades and has become an important competitive advantage for Europe. Indeed, similar EPR systems are increasingly being considered and adopted in other regions, including the United States. There are growing indications that policymakers in both Brussels and Berlin now recognise this strategic potential. Going forward, it will be important to ensure that evidence-based policymaking takes precedence over ideology, while the administrative burden associated with EPR is reduced through greater harmonisation, digitalisation and more efficient implementation.
VERE will continue to work actively with policymakers and industry stakeholders to promote these objectives on behalf of its members.
VERE e.V. remains in close contact with the relevant stakeholders and will continue to keep its members informed of further developments via the “VERE Insider”.
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