In an era of geopolitical tensions, supply chain disruptions, and rising global competition, the European Union faces mounting calls for protectionism. Proposals for “Buy European” rules, mandatory domestic content requirements, and tariffs on imports, particularly from China, have gained traction in Brussels and national capitals. Yet in today’s stormy global environment, turning inward would be a profound error. International trade has long been the bedrock of Europe’s prosperity, and abandoning openness in favor of barriers would impoverish consumers, stifle innovation, and ultimately weaken the continent’s economic resilience.
The evidence is clear: Trade openness drives Europe’s wealth. The EU is the world’s largest trading bloc, with exports and imports of goods and services accounting for over 90% of GDP when intra-EU trade is included. Even extra-EU trade alone represents around 22% of GDP, a figure that has steadily increased over the past decade. This deep integration has delivered lower prices, greater product variety bands or innovation impulses for domestic producers. It delivers sustain economic growth. Studies show that EU trade agreements have boosted growth while directly reducing consumer costs and expanding choice. Without access to global markets and efficient imports, Europe’s high living standards, reflected in an average GDP per capita exceeding €40,000, would gradually erode.
Proponents of protectionism often argue that domestic industries must be shielded from “unfair” competition, particularly in response to challenges such as Chinese overcapacity in electric vehicles or broader fears of de-industrialization. Recent measures, including countervailing duties on Chinese EVs (reaching up to 45% in some cases) and the Carbon Border Adjustment Mechanism (CBAM), which is entering its definitive phase from 2026, aim to level the playing field. Additional tools, such as the Foreign Subsidies Regulation and initiatives under the Industrial Accelerator Act, further signal a shift toward managed trade. While these instruments may address specific distortions, they carry the risk of expanding into broader barriers that ultimately harm the EU more than they help.
Critics, ranging from developing countries to several EU member states, have highlighted the protectionist undertones of these policies. CBAM, for example, has drawn strong objections from China, India, and others, who label it “green protectionism” masquerading as climate policy. They argue it risks violating WTO principles and raising costs across global supply chains. Within the EU, the replacement of free emissions allowances with CBAM has placed disproportionate strain on certain industries and Eastern European economies, without fully shielding the most vulnerable sectors. Meanwhile, “Buy Europe” agendas in defense procurement and import quotas on products such as ferro-alloys have exposed internal divisions, with more trade-oriented member states warning of retaliation and higher costs.
At the core of many protectionist initiatives lies rent-seeking by organized interest groups, including segments of large industry. Import-competing firms often lobby for bans, restrictions, or mandatory domestic production shares in order to secure economic rents – profits protected from competition rather than earned through efficiency. This dynamic, well documented in EU policy history, distorts markets, raises prices for consumers and downstream industries, and concentrates benefits among a narrow group of insiders. By contrast, export-oriented firms and consumers benefit from openness, yet their interests are typically more diffuse and less politically mobilized.
In a turbulent global environment shaped by U.S. policy shifts, geopolitical instability, and slowing growth, the EU’s comparative strength lies in its openness. Not in the opposite! Expanding trade agreements, reducing non-tariff barriers, and resisting rent-seeking pressures would better equip Europe to navigate these challenges. Protectionism may offer short-term political appeal, but it invites retaliation, fragments supply chains, and ultimately undermines the very prosperity it claims to defend. Europe’s future depends on remaining a champion of rules-based international trade, not retreating behind walls erected by special interests.
Author: Aleš Rod