EU Targets Foreign Subsidies, Aiming at China but Worrying U.S. Companies

BRUSSELS—European Union lawmakers struck a political settlement on new guidelines for firms that reap monetary advantages from governments outdoors the bloc, pushing ahead a proposal that sparked concern from some U.S. enterprise teams.

The regulation, beneath a deal reached late Thursday, primarily targets companies from China and elsewhere with authorities backing. It would permit the European Commission, the EU’s government physique, to dam such companies from making certain acquisitions or successful giant public contracts in the event that they beforehand benefited from overseas subsidies that regulators deem to be distortive.