EU Council Summit Preview - What to Watch For

Research evidence excerpt

EU Council Summit Preview - What to Watch For

EUROPE | Sustainability & Transition

Strategy June 12, 2026

Exhibit 1 - Chinese OEMs are gaining marketEU Council Summit Preview - What to Watch

share in Europe at a record pace, reaching +5%

as of March 2026For

Chinese OEM share in Europe - Y/Y change

The upcoming EU Council summit (18-19 June) could result in a more

coherent China strategy being proposed, featuring two policies: 1) a Section

301-style overcapacity tool enabling further tariffs or import quotas on

Chinese products and 2) requirements for European companies to diversify

supply chains from "single-supplier dependency". High-risk and strategic

sectors to be targeted, e.g., Chems, Autos, low-carbon sectors, telecoms, .Source: National data source, ACEA, JEFe

semis.

Exhibit 2 - Protections may take 2 years to

implement, but they are shifting corporate

Following our EU-China takeaways from our Brussels trip (note), we now turn to next week's Council capital allocations and equity markets today

summit.

Table 1 - The EU is looking to protect sectors with high dependence on China, of strategic importance,

or that pose security risks

.

Source: Jefferies

The EU enters the summit under increasing competitive pressure. Chinese OEM market

share in Europe rose ~5pp YoY in March 2026, a record gain despite BEV tariffs up to 45%

(Exhibit 1). The trade deficit stood at ~€360bn in 2025. Chinese exports to the EU rose by 9%

in 2025, yet current trade defence measures cover only ~9% of those flows. The gap between

challenge & response is widening — and this summit will test willingness to respond across

the EU27.

The Council could propose two new protectionist measures next week.

1. President Macron has called for "the EU equivalent of Section 301". This would enable the