October 27, 2025 – The prices for base metals on the Shanghai Futures Exchange (SHFE) continued their stable sideways movement or recorded further gains on Monday, following a positive end to last week. Trade relations between China and the EU remain rather tense at the moment – and now, the EU’s so-called “Trade Bazooka” has entered the discussion.
Base Metals Start the Week Stable and Friendly
The prices for base metals on the Shanghai Futures Exchange (SHFE) continued their stable sideways movement or recorded further gains on Monday, following a positive end to last week. Lead (-0.17%), zinc (+0.22%), and nickel (+0.34%) traded sideways, while aluminum (+0.57%) remained strong and in an upward trend. Copper posted the largest gain, rising by 1.87%.
LME base metals stable
The LME base metals in London also started the new trading week on Monday with a stable opening.
Is the EU Firing Blanks Toward China?
The trade policy atmosphere between the People’s Republic of China and the European Union is currently rather tense. After a Dutch company, which has belonged to a Chinese Company since 2019, was nationalized at the end of September, China responded shortly thereafter with an export ban on the semiconductor chips produced by that company – a move that could pose major challenges for European car manufacturers. In addition, on October 9, 2025, China imposed export restrictions on rare earth elements. The EU currently depends on China for about 90% of its rare earth imports.
The current discord on both sides was also reflected in the short-notice cancellation of the planned visit by German Foreign Minister Johann Wadephul (CDU) to China, where, according to media reports, “no one currently wants to meet with him.”
Commission President Brings Anti-Coercion Instrument Into Play
Instead of aiming for de-escalation, European Commission President Ursula von der Leyen poured more oil on the fire over the weekend, indirectly threatening to use the so-called “EU Trade Bazooka,” the Anti-Coercion Instrument (AIC). This comes after her Trade Commissioner, Maroš Šefčovič, had emphasized just last week that the EU “has no interest in an escalation.”
Further pressure is coming from France. During the EU summit on Thursday, French President Emmanuel Macron said that the Commission should consider using the “Trade Bazooka” against China.
EU Trade Bazooka Loaded Only With Blanks?
However, it seems clear that the ‘trade bazooka’ is presently loaded with blanks rather than sharp ammunition. Europe’s economic situation is more than fragile, and companies dependent on imports and exports are unlikely to appreciate the EU’s combative rhetoric – especially if the AIC were actually used and China were to respond in kind.
Whether China truly feels threatened by the prospect of its use is doubtful. Should China and the United States reach a lasting trade deal this week, the much-coveted chips and rare earth elements might end up flowing to the U.S. instead of Europe.
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