EU-China trade tensions: Five things to know as Brussels and Beijing face crunch talks
The next ten days will be critical for EU-China relations. EU Trade Commissioner Maroš Šefčovič will travel to Beijing later this week for high-level talks aimed at rebalancing the trade relationship and securing “tangible” results ahead of next week’s meeting of EU leaders.
After months of escalating tensions, the European Union and China are on the brink of crucial talks in Beijing at the end of October. The stakes are high for the EU, whose trade deficit with China has reached a record €1 billion a day. EU Trade Commissioner Maroš Šefčovič will meet with his Chinese counterpart Wang Wentao to discuss a balance in their trade relationship.
The stakes have never been higher, with the EU facing a growing threat of Chinese competition. Sectors such as pharmaceuticals, aerospace, automotive, machine tools, and chemicals are under pressure, putting thousands of jobs at risk. The European Commission has issued a stark warning, with Commissioner Stéphane Séjourné stating that the EU already lost 250,000 industrial jobs last year.
The German government has recently shifted its stance on China, with Chancellor Friedrich Merz and French President Emmanuel Macron calling for the full use of EU trade defense instruments and a comprehensive framework. They propose a tool that would allow decisive and systemic reactions, including measures that could lead to an immediate cut-off from the internal market if necessary.
The EU is also worried about its dependence on China for critical resources. Beijing has blocked exports of rare earths to the EU, a resource essential for various industries. However, after a short truce, exports resumed. Any solution between the EU and China must balance interests, comply with WTO rules, and accommodate both parties' domestic laws.
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