The EU has agreed on specific measures centered on introducing an HEV safeguard to redress the trade imbalance with China and is accelerating legislation such as the Industrial Promotion Act. This is expected to broaden efforts that will prompt Japanese companies to reorganize their supply chains.
The EU has reached an agreement on specific measures, including the introduction of an HEV safeguard, to redress the trade imbalance with China, and is accelerating legislation addressing macroeconomic imbalances. This is expected to lead to tighter regulations targeting China.
As of 2026, EU imports from China continued to increase, while exports from Japan to China continued to decline, bringing the full-year trade deficit close to a record high. On a volume basis, the increase in imports from China and the decline in exports to China were pronounced, and this trend continued even in indicators excluding price fluctuations.
Tighter EU trade regulations could prompt Japanese companies to reorganize their supply chains.