The European Union (EU) is facing escalating tensions with China over trade, particularly concerning electric vehicles (EVs) that are believed to be flooding the EU market due to state subsidies. Josep Borrell, the EU's outgoing foreign affairs chief, warned that a trade war might be 'unavoidable' as the U.S. imposes higher tariffs on Chinese cars, redirecting them to Europe. In response, the EU has proposed tariffs of up to 36.3% on Chinese EVs to protect its own industry. Meanwhile, China has initiated an anti-subsidy investigation into EU dairy imports, signaling a tit-for-tat trade conflict. Despite these rising tensions, Borrell emphasized the need for the EU to avoid systematic confrontation with China, recognizing its status as a technological powerhouse. The situation reflects broader geopolitical dynamics, with both sides asserting their interests amid increasing competition.