For years, Brussels has tried to shield European industry from a flood of cheap Chinese goods. Now, Beijing is finding a new way in: not through the EU's front door, but through its neighbours. By pouring billions into Morocco and Turkey, China is using the bloc's own trade agreements to slip past its defences.
Both countries enjoy privileged access to the EU market — Morocco through an association agreement that liberalises trade, and Turkey through a customs union. That means goods manufactured there can enter the EU duty-free, even if the factories behind them are Chinese-owned. For Beijing, which faces EU anti-subsidy duties on electric vehicles and other products, these gateways offer a legal workaround.
European policymakers are now bracing for a surge of low-cost Chinese imports arriving via Casablanca, Tangier, Istanbul and Ankara. The European Commission opened negotiations with Beijing in June to rebalance a trade relationship that has left the EU with a €1 billion deficit, but Trade Commissioner Maroš Šefčovič has set an October deadline that may not be met.
A new front line in the trade war
China's circumvention strategy is becoming increasingly sophisticated. According to the Rhodium Group, an independent research provider, Chinese investment in Morocco has reached a record $6 billion over the past four years, with another $2 billion going to Turkey. Egypt has also attracted $6 billion in 2025 alone, though most of that output is destined for the US and Gulf markets.
In Morocco, Beijing is building an entire electric vehicle ecosystem. Chinese battery maker Gotion is setting up operations, alongside BTR, Tinci and Huayou, which produce battery materials, as well as APG, an automotive brake manufacturer, and Sentury Tire. “There is a genuine long-term trend that began after COVID-19,” said Armand Meyer, an expert at Rhodium Group. “We are seeing Chinese companies setting up operations in the country to manufacture high-value-added goods.”
Turkey is a similar story. Chinese EV giant BYD was granted preferential access to build a factory, though the project is currently suspended. Home appliance maker Haier and solar panel manufacturer Astronergy are also investing. Part of this output targets the local market, but much is aimed at Europe.
The EU's concern is not just about cars. The free trade agreements with Morocco and Turkey cover almost all goods, making it hard to single out specific sectors. “It's complicated to counter the Chinese export strategy,” said Thomas Grjebine, an economist at the French Centre for Research and Expertise on the World Economy. He noted that China has understood these countries can serve as “a staging ground”, with investments rising year after year. “Investments in these gateway countries account for about a quarter of China's total investment in Europe and the Maghreb,” he added.
Brussels fights back — but with what?
The European Commission has proposed the Industrial Accelerator Act (IAA), a landmark bill designed to protect the EU market from foreign competitors. It would create a European preference for public procurement and EU funding, excluding non-EU countries under certain conditions. China is clearly in the crosshairs, and Beijing has threatened retaliation.
But the IAA has created a dilemma. European carmakers, represented by ACEA, are lobbying EU lawmakers to include Morocco as a trusted partner, because many EU manufacturers have production plants there. If Morocco and Turkey were deemed trusted, their products could be labelled “Made in Europe” — which would also benefit Chinese factories in those countries.
“The Chinese know full well that a number of companies have located part of their value chain in those countries and are lobbying hard to ensure that Morocco and Turkey are not excluded from what is considered 'Made in Europe',” said French socialist MEP Pierre Jouvet. “This is part of Beijing's investment and tariff circumvention strategy.”
Jouvet is campaigning to exclude Morocco and Turkey from the IAA unless they open their public procurement markets to EU companies. He is backed by French liberal MEP Christophe Grudler and German Green MEP Anna Cavazzini. They are expected to present a report to fellow MEPs in September.
The stakes are high. If Brussels fails to adapt, the EU could see its trade defences eroded by a steady stream of Chinese goods entering through its own neighbourhood. As the debate over the IAA heats up, the question is whether the bloc can craft a response that protects its industry without alienating its partners.
