{
  "id": 15883155,
  "title": "The EU will ‘pull its punches’ on China despite growing trade war talk: analysts",
  "url": "https://urgent.news/2026/10/21/the-eu-will-pull-its-punches-on-china-despite-growing-trade-war-talk",
  "topic": "world",
  "section": "World",
  "published": "2026-10-21T12:00:10.000Z",
  "source": {
    "name": "South China Morning Post",
    "slug": "south-china-morning-post",
    "url": "https://www.scmp.com/economy/china-economy/article/3371655/eu-will-pull-its-punches-china-despite-growing-trade-war-talk-analysts"
  },
  "original_language": "en",
  "account": "The European Union is unlikely to engage in a significant trade conflict with China, despite recent increasing tensions, according to a leading research firm. Analysts at Capital Economics, a London-based firm, predict that the EU will \"pull its punches\" in any confrontation with Beijing due to internal divisions and the fear of retaliation. This cautious approach is further influenced by the EU's heavy dependence on China for goods such as critical minerals. While the bloc has raised concerns over potential retaliation, it has also expressed hope in preserving the rules-based global trading system. The EU decides on tariffs, while member nations manage investment policies, creating a \"split\" responsibility for trade policy. A recent deal between China and the EU limits Chinese hybrid vehicle exports to Europe, capping at 350,000 vehicles per year, with the quota increasing by 6% annually over the next four years. This reduction is a significant decrease from the original projection of 800,000 Chinese hybrid cars. The EU faces a trade deficit with China of over €1 billion (US$1.12 billion) per day, which has continued to rise. Capital Economics forecasts a 50% probability of a crisis within two to three years if China continues to increase its export share, and if populist and nationalist policies emerge in the West over competition with China.",
  "summary": "The European Union is likely to avoid a full-blown trade confrontation with China due to internal divisions in the bloc and fear of retaliation, according to a prominent research firm. The projection comes amid speculation that the two sides are on the brink of a trade war, with European policymakers raising the alarm about a looming “China shock 2.0” and pushing for stronger measures to protect…",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}