The trade tensions between the EU and China are extending from Chinese ports all the way to Morocco and Turkey.
According to Euronews, over the past four years, Chinese companies have invested approximately $6 billion in Morocco and about $2 billion in Turkey. Morocco is developing a new energy vehicle industry chain that includes batteries, materials, tires, and automotive components. Companies such as Guoxuan Hightech, Bestray, Tianci Materials, and Huayou Cobalt have established projects in these areas. Turkey has attracted companies like BYD, Haier, and photovoltaic manufacturers. The importance of these two countries lies in the fact that trade in industrial products between the EU and Morocco has been fully liberalized, while Turkey has eliminated tariffs and quantitative restrictions on industrial goods through its customs union with the EU.
In Brussels' view, this could become a new channel for Chinese companies to bypass trade barriers. In 2024, the EU imposed countervailing duties on Chinese electric vehicles. Now, if the related products are produced in Moroccan or Turkish factories, they may be able to enter the European market based on their local origin.
However, the crux of the issue is that these two countries are not merely China's "springboard" for businesses, but also important production centers for the European automotive industry.
Renault has factories in Tangier and Casablanca in Morocco. According to official figures, 82% of the production from these two factories is exported to 63 markets, including France, Spain, Germany, and Italy. Stellantis has a complete vehicle manufacturing plant in Gennertra, and continues to expand its production capacity. In Turkey, Renault’s Bursa factory has an annual capacity of approximately 390,000 vehicles. Ford Otosan, formed by Ford and local companies, is also an important base in the European commercial vehicle supply chain.
This has put the EU in a nearly insoluble situation.
In March of this year, the European Commission proposed the “Industrial Accelerators Act,” aiming to introduce the concepts of “European manufacturing” and low-carbon preferences in public procurement and public funding. Whether Morocco and Turkey can be included as “trusted partners” has become a point of contention. The Association of European Automobile Manufacturers is lobbying EU lawmakers, hoping that Morocco will qualify as a trusted partner, as European automakers have already placed a large portion of their production capacity and supply chains there.
Once Morocco and Turkey are considered extensions of “European manufacturing,” Chinese companies producing batteries, components, and even complete vehicles locally could also benefit. If these two countries are excluded, it is likely that Renault, Stellantis, and other European manufacturers will be the first to suffer.
Traditional anti-bias investigation methods are also becoming increasingly ineffective. In the past, if Chinese goods were simply assembled in third countries or had certificates of origin replaced, the EU could trace the Chinese components and local value added within those products. But now, Chinese enterprises build real factories with equipment, employees, and local supply chains. When the local value added is significant, the EU cannot easily classify these products as “entry goods” and must instead prove that the enterprise engages in dumping or unfair subsidies. The investigation costs are higher, and the legal requirements are more stringent.
This controversy indicates that global trade protection is entering a new phase: tariffs can be applied to goods, but it is difficult to break down industrial chains that are already intertwined with each other. The EU wants to effectively block Chinese companies based on the ‘nationality’ of capital and supply chains, but European companies themselves already rely on the same third-country production bases.
Ultimately, Brussels is faced not just with the question of whether Chinese goods should be taxed, but with a much more difficult decision: whether to protect European brands or protect domestic production in Europe; whether to reject Chinese capital or accept that Chinese factories have become part of the surrounding industrial chain.
No matter how rules are designed, it will be difficult for the EU to block China alone without incurring costs on its own automakers.
