The governments in Paris and Berlin want to protect industry from China. This is causing fear in two major sectors.

Berlin and Paris are planning a protectionist industrial policy with subsidies for European producers. While car manufacturers hope for support, global industries and aspiring executives express concerns. The initiative aims to reduce dependencies.

Berlin/Paris, October 14, 2026 – The governments in Paris and Berlin are increasingly pursuing protectionist strategies to shield European industry from growing competition from China. At the core of these efforts is the idea of making state funding primarily accessible to European producers in the future – an approach that is eliciting mixed reactions within business associations and raising concerns particularly in two major sectors, but also among students and executives interested in pursuing an MBA. While some sectors hope for extensive support, others that are heavily integrated into global supply chains see their business models at risk.

The intention to strengthen European companies through exclusive subsidies aims to secure the domestic production base and reduce dependence on non-European markets. This protectionist course, which shows parallels to similar developments in the USA, is welcomed by parts of the industry. Automobile manufacturers, in particular, see it as an opportunity to remain competitive in global competition, especially in the field of electromobility and battery technologies, and to anchor investments in Europe. The hope is that subsidized research and development, as well as domestic production, will strengthen innovative power and secure jobs.

Global supply chains under pressure

However, other industry associations are expressing great concern. They argue that sealing off the European market and turning away from global supply chains could weaken the competitiveness of many companies. In particular, industrial sectors with complex, internationally branched production networks fear higher costs, lower efficiency, and a restriction of their ability to innovate due to the loss of access to key components or markets outside Europe. The concern is that such a policy could ultimately lead to deindustrialization if European products become less attractive due to rising production costs. The debate highlights the tension between the desire for strategic autonomy and the realities of global economic interdependence.

For aspiring executives and students considering an MBA, this development is of significant relevance. The future direction of industrial policy in Europe will have a direct impact on career opportunities, the strategic planning of companies, and the design of international business models. MBA programs specializing in Global Business, Supply Chain Management, or International Management will increasingly need to integrate these dynamic shifts into their curricula. An understanding of protectionist tendencies, geopolitical risks, and the ability to design and manage complex international value chains will become even more critical key competencies for successful managers.