EU, China to hold Beijing talks to avert trade war

The European Union is set to engage in high-stakes trade talks with China in Beijing to prevent a potential trade war, according to EU Trade Chief Maros Sefcovic. The EU has been increasingly concerned about what it perceives as unfair competition from China in critical sectors such as cars and machinery. European leaders have coined the term "China Shock 2.0" to describe China's shift towards high-tech manufacturing, which is threatening traditional EU industries.

The EU is preparing to bolster its trade defense capabilities, but Chinese officials have threatened retaliation against any measures targeting China. While experts suggest there may be modest progress, a major breakthrough appears unlikely. The EU aims to address sectors facing sustained import increases, such as machinery and chemicals, and hopes to include other products through voluntary limits.

Beijing opposes import quotas, relying on exports to sustain growth. The EU is also developing tools to support businesses in diversifying their supplier base, but the extent of its willingness to take aggressive action against China remains uncertain due to fears of provoking Beijing.