Week Ahead (19 October)

Tuesday, 20 October – AliExpress faces DSA compliance deadline following €550 million fine and legal challenge

AliExpress faces a 20 October deadline to submit a formal action plan to the European Commission detailing how it intends to address outstanding infringements of the Digital Services Act (DSA), following the €550 million fine imposed in July. The deadline comes as the Alibaba-owned platform challenges the decision before the EU General Court, arguing that the penalty is disproportionate and does not sufficiently reflect its existing compliance framework and voluntary investments in product safety and risk management.

The Commission imposed the largest DSA fine to date after concluding that AliExpress had failed to adequately mitigate risks associated with illegal and unsafe products. The investigation, opened in March 2024, initially covered a broader range of suspected infringements, including advertising transparency and recommender systems. Several concerns were addressed through commitments accepted by the Commission, but Brussels identified persistent shortcomings in the platform's management of illegal product risks.

In particular, the Commission found that AliExpress had not adequately assessed whether sufficient resources were devoted to content moderation, with reviewers in some cases given only seconds to assess potentially illegal listings. It also identified weaknesses in the platform's assessment of how its advertising and recommendation systems could facilitate the dissemination of illegal products, alongside safeguards that could be circumvented through incorrect product categorisation.

The legal challenge does not suspend the company's compliance obligations, meaning AliExpress must proceed with the prescribed corrective measures while its appeal is considered. The immediate question is whether the action plan sufficiently addresses the Commission's findings and provides a credible implementation framework. Continued non-compliance could expose the company to additional penalties, while the parallel court proceedings will test both the Commission's assessment of systemic risk management failures and the proportionality of its sanction. The case represents another important test of the Commission's increasingly assertive DSA enforcement approach.

Tuesday, 20 October – Parliament to vote on Critical Raw Materials Act amendments as EU seeks to strengthen supply chain resilience

The European Parliament is expected to vote tomorrow on amendments to the Critical Raw Materials Act (CRMA), as the EU seeks to reduce its dependence on third country suppliers and strengthen domestic extraction, processing and recycling capacity. The vote comes amid heightened concerns over Chinese export restrictions and Europe's vulnerability to disruptions in supplies of materials essential for batteries, semiconductors, renewable energy technologies and defence.

The proposed revision, presented by the Commission in December 2025 as part of its RESourceEU initiative, introduces targeted changes to the existing framework aimed at accelerating strategic projects, simplifying implementation requirements and supporting the development of a European market for recycled critical raw materials. The broader objective is to make the EU's raw materials strategy more operational, following criticism that regulatory targets have yet to translate into sufficient investment and production capacity.

The Parliament's Industry Committee, led by S&D rapporteur Mohammed Chahim, has proposed strengthening several elements of the Commission's approach, including support for strategic projects and measures to improve the resilience of European supply chains. The amendments also address the proposed European Critical Raw Materials Centre, which would coordinate joint purchasing, strategic stockpiling and the identification of supply vulnerabilities. The development of a more coordinated European approach has gained political urgency as China continues to use its dominant position in several raw materials markets to exert economic pressure.

The vote will establish Parliament's negotiating position ahead of discussions with the Council. Particular attention will fall on the extent to which MEPs support stronger common purchasing and stockpiling mechanisms, the treatment of third country suppliers and measures to improve the commercial viability of European production and recycling projects. Even though the revision is relatively targeted, its implementation could prove important for the EU's wider economic security and industrial policy agenda, particularly efforts to reduce dependence on Chinese-controlled supply chains.

Thursday, 22 October – Friday, 23 October – EU trade ministers to discuss China policy following hybrid vehicle agreements and subsequent EUCO discussion

EU trade ministers will meet informally in Dublin on 22–23 October, with relations with China expected to dominate discussions following the recent agreement on Chinese hybrid vehicle exports to the EU and indications that Brussels is considering further trade restrictions targeting chemicals and industrial machinery. The meeting follows last week’s European Council, where Commission President Ursula von der Leyen briefed EU leaders on the EU's response to Chinese industrial overcapacity and growing import competition. The discussions come amid mounting pressure for a more assertive European trade policy, as governments seek to address Chinese subsidies and the EU's widening bilateral trade deficit, which reached approximately €360 billion in 2025.

Trade Commissioner Maros Sefcovic visit to Beijing on 8–9 October resulted in an understanding aimed at limiting Chinese hybrid vehicle exports to the EU, following the rapid expansion of imports of hybrid and plug-in hybrid vehicles. Under the reported arrangement, annual imports would be capped at approximately 350,000 vehicles in 2027, less than half the volumes expected this year, with the quota increasing by 6% annually thereafter. The proposed safeguard mechanism would combine an import quota with additional tariffs on volumes exceeding the agreed threshold, with the Commission aiming to have the measures ready by December. The agreement marks a significant development in EU-China trade relations, extending efforts to protect European automakers beyond battery-electric vehicles, which are already subject to countervailing duties.

The Commission is now examining whether a similar approach could be extended to other sectors facing growing competition from Chinese imports. In her briefing ahead of the EU leaders last Friday, President von der Leyen identified chemicals and industrial machinery as priorities during last week's European Council, with safeguards viewed as one of the more effective instruments available to Brussels. Both sectors face increasing pressure from Chinese producers, with China overtaking Germany as the world's largest machine tool exporter in 2025, while its share of EU chemical imports has doubled over the past decade to approximately 18%. Sefcovic has described the hybrid vehicle arrangement as a potential blueprint for other industries, although no formal safeguard investigation has yet been launched in the two sectors. It also remains unclear whether Beijing would be prepared to accept similar restrictions beyond automotive imports.

The developments come against the backdrop of a notable shift in Germany's position on trade defence. Berlin has moved closer to France in calling for stronger measures against subsidised Chinese imports, reflecting mounting pressure on German manufacturers and the wider European industrial base. The emerging Franco-German alignment could strengthen political support for additional Commission action, although concerns over Chinese retaliation and the implications for European exporters remain important constraints. The prospect of extending safeguards to chemicals and machinery will therefore provide an early indication of whether the recent agreement on hybrid vehicles represents an isolated negotiated solution or the beginning of a broader European response to Chinese industrial competition.

Beyond China, ministers are expected to review ongoing bilateral trade negotiations and the EU's wider diversification strategy. According to the preliminary agenda, Canadian Trade Minister Maninder Sidhu may attend discussions on 22 October, while US Trade Representative Jamieson Greer could participate the following day, although their attendance remains subject to confirmation. These exchanges would also provide an opportunity to address outstanding trade frictions and progress in strengthening commercial relations with strategic partners.

The informal meeting is unlikely to produce binding decisions but should provide a useful indication of member state appetite for further trade defence measures. Particular attention will fall on whether Germany and France push for a broader application of safeguards, how the Commission intends to operationalise the hybrid vehicle agreement and whether chemicals and industrial machinery emerge as the next priorities for action.

Thursday, 22 October – European Parliament plenary to vote on targeted ETS heat and fuel benchmark changes aimed at easing industrial carbon costs

The European Parliament is scheduled to vote on Thursday on a targeted amendment to the EU Emissions Trading System (ETS) that would increase free allowance allocations for industrial installations covered by the heat and fuel benchmarks during 2026–2030. Presented by the Commission in July as a separate proposal accompanying the broader ETS revision, the measure seeks to ease compliance costs for energy intensive industries without changing the overall emissions cap.

The proposal responds to concerns that updated benchmarks for the 2026–2030 period would substantially reduce free allocations for certain industrial installations. The Commission proposed adjusting the benchmark methodology to mobilise approximately 80 million additional allowances from the existing free allocation buffer, providing an estimated €6 billion in industrial relief.

Thursday's vote will establish Parliament's position on this targeted form of ETS flexibility, with the Council having already agreed its position on 16 September. This could pave the way for negotiations between the institutions and potentially accelerate adoption of the changes for the 2026–2030 allocation period. Notably, the Council's September position goes beyond the Commission's original proposal in terms of the allowances mobilised. The key question therefore is whether Parliament will support this additional flexibility and how quickly the institutions can finalise the changes ahead of their implementation during the current trading period.  Although this file is separate from the broader ETS review and ongoing debate over the Market Stability Reserve (MSR), the proposal is indicative of the growing political emphasis on reducing near term industrial carbon costs.