China and Türkiye could face significant commercial exposure under the EU’s proposed expansion of the Carbon Border Adjustment Mechanism (CBAM) to downstream manufactured goods. The proposed shift beyond basic metals would bring a wider range of components and industrial equipment into the policy’s scope, with implications for exporters and European buyers reliant on established international supply chains.
The European Commission’s impact assessment, based on 2024 trade data, estimated that exports covered under its balanced expansion option would amount to approximately €18 billion for China and €8 billion for Türkiye. Comparable exposure was estimated at €6 billion for the United States, €5 billion for the United Kingdom and €3 billion for Japan.
These figures relate to an assessed policy option, not actual 2026 imports, the final negotiated product list or estimated CBAM payments. Broader product coverage proposed by the Council and European Parliament could materially change the exposure of individual trading partners.
China’s Manufacturing Scale Creates Switching Challenges
China’s position reflects the scale of its manufacturing supply to European markets. For EU importers, replacing an established component supplier may require new tooling, technical qualification and production trials, creating additional costs and potential delays.
Higher carbon-related costs could therefore increase the price of Chinese components without immediately eliminating European demand for them. Where suppliers offer significant production capacity or specialised technical expertise, buyers may find that switching sources is more complicated than comparing quoted prices.
The commercial impact will depend on individual products, supplier capabilities and the extent to which any additional CBAM liability changes the total cost of procurement.
Türkiye Retains Proximity and Established Trade Links
Türkiye presents a different sourcing proposition because of its proximity to major EU markets and its established industrial relationships with European customers. Shorter delivery routes and existing supplier networks can support continued purchasing even as buyers reassess carbon-related costs.
These advantages do not create a CBAM exemption, however, and they cannot automatically offset a higher emissions assessment. The relative attractiveness of Turkish suppliers will depend on the combined effect of production costs, logistics, emissions evidence and any applicable CBAM liability.
Country Rankings Cannot Replace Supplier-Level Data
Exposure will vary significantly among producers within China and Türkiye. Different metal inputs, production routes and manufacturing processes can result in different recognised emissions, even when suppliers operate in the same country or manufacture comparable products.
A country-level ranking can help businesses identify where trade exposure may be concentrated, but it cannot replace installation-level emissions evidence when buyers compare individual suppliers. Procurement decisions will increasingly require information that connects the finished product to its relevant inputs and production processes.
Exporters could respond by improving emissions documentation, negotiating how additional costs are allocated between suppliers and buyers, changing qualifying input sources or investing in production efficiency. Some may seek alternative export markets, although the commercial case for redirecting sales will depend on demand, tariffs and the costs of securing replacement customers.
Supply-Chain Changes Require Defensible Evidence
Routing goods through another country should not be treated as a straightforward means of eliminating precursor emissions. Any revised supply chain must reflect genuine production activities and be supported by defensible records.
The proposed anti-circumvention provisions increase the importance of identifying the production installation associated with an emissions claim. Changes in the location of final processing do not, by themselves, establish that the underlying metal or other relevant inputs have a different emissions profile.
For European procurement teams, the immediate priority is to model supplier-specific landed costs alongside the financial and operational consequences of switching. Broad assumptions that imports from one country will disappear, or that another country will automatically gain market share, offer a weak basis for sourcing decisions.
The proposed expansion could put established trade relationships under pressure, but headline export values alone do not determine the outcome. Exporters will need to defend the price and emissions evidence for each affected product, while European buyers assess whether alternative suppliers can deliver comparable quality, capacity and reliability at a competitive total cost.
