Echoes of Protectionism: From 1887 to China’s Rise

In 1887, the British Parliament passed the Merchandise Marks Act to safeguard British industry against products falsely claiming British origin, many of which were cheaper and, increasingly, of comparable or superior quality to those made in Germany. This legislation arose from a growing concern about Germany’s emergence as an industrial power, challenging Britain’s long-held position as the “workshop of the world.” Today, a similar dynamic is unfolding with China, prompting renewed discussions about protectionism and the future of European manufacturing.

The Rise of Germany and the 1887 Act

By 1870, Britain held the position of the world’s largest economy and a dominant military force, boasting unparalleled industrial and innovative capabilities. The British Empire was at its peak. However, following German unification in 1871, German goods, initially perceived as inferior copies, rapidly improved in quality. German industrialists engaged in what was perceived as industrial espionage, studying British manufacturing processes to enhance their own.

The Merchandise Marks Act 1887 (50 & 51 Vict. C. 28) aimed to prevent foreign manufacturers from falsely labeling their goods as British-made, particularly for sale in Britain and Europe. The Act also prohibited false claims of royal warrants. As noted in a working paper from the London School of Economics, the Act generated controversy abroad, with German Chancellor Gustav Stresemann later viewing it as a starting point for deteriorating political relations between Britain and Germany leading up to World War One.

Germany’s Industrial Surge

Despite the Act, Germany’s industrial growth continued unabated. Between 1895 and 1907, the number of workers in German machine building doubled, and emigration from Germany significantly decreased. By 1914, Germany surpassed Britain in steel production and boasted a greater number of Nobel Prize-winning scientists. This rapid industrialization signaled a shift in the global economic order.

China’s Ascent and Contemporary Concerns

The parallels between Germany’s rise in the late 19th and early 20th centuries and China’s current economic expansion are striking. Chinese exports to the European Union have surged, particularly since facing tariffs in the United States. In January and February of 2026, Chinese exports to the EU increased by nearly 28 percent. The EU’s trade deficit with China has grown dramatically, from €39.6 billion in 2001 to over €359.3 billion in 2025, a 20 percent increase from €304.5 billion in 2024.

The Automotive Sector

One of the most visible indicators of China’s growing economic influence is the increasing presence of Chinese cars in Europe. In 2025, Europe imported €12.7 billion worth of Chinese cars, a 1,591 percent increase since 2019. China has develop into the single largest source of EU car imports, accounting for 16.7 percent of the total, surpassing Japan (16.1 percent), the UK (14.5 percent), and the US (11 percent). With the global shift towards electric vehicles – a sector where China holds a significant advantage in battery technology – the future of Germany’s automotive industry, and by extension, the broader European economy, is facing uncertainty.

The “Parcel Economy” and New Logistics Networks

Beyond traditional trade, a new wave of Chinese exports is arriving in Europe through small-scale e-commerce platforms like Shein and Temu. These companies are undercutting established retailers, contributing to high street closures. To meet the logistical demands of this “parcel economy,” Chinese companies are leveraging the Chinese diaspora in Europe, utilizing homes and sheds as makeshift warehousing and distribution centers, offering rates of around €1.16 per package. Reports indicate individuals can earn up to €4,500 per month through this network, with hundreds of “family warehouse” opportunities advertised on Chinese social media platforms.

Looking Ahead: Protectionism and the Future of Trade

As China’s economic power continues to grow, the question of what Europe can offer in return becomes increasingly pertinent. Historically, even at the height of British industrial power in the 19th century, China had limited demand for British manufactured goods, leading to the infamous opium trade. The prospect of a similar scenario – where Europe lacks competitive exports to China – raises the possibility of protectionist measures, mirroring the “Trump playbook” of tariffs.