The 50th anniversary of EU-China diplomatic ties was intended as a symbol of enduring partnership and deepening cooperation. Instead, what was planned as a two-day event was abruptly cut to one and relocated to Beijing, making clear the changing temperature in the relationship. European Commission President Ursula von der Leyen openly declared the relationship at an “inflection point,” with “rebalancing” now essential after talks with Chinese President Xi Jinping.
A Summit Meant to Celebrate—Overshadowed by Discord
Both sides called for improved dialogue, acknowledging political and ideological differences they should work through. Yet, as Xi warned, “The sterner the international situation, the more China and Europe need to step up communication, enhance mutual trust and deepen cooperation.” However, European leaders arrived with a string of grievances over Beijing’s unwavering support for Russia and mounting trade imbalances.
Von der Leyen did not mince words: Beijing’s stance on Moscow would be a “determining factor” for future ties. The EU even blacklisted two Chinese banks as part of its latest sanctions against Russia, and European Council President António Costa used the summit to urge China to pressure Moscow for a resolution to the Ukraine war. European officials warned Beijing risked underestimating European resolve on Russia—comments that seemed to provoke clear irritation from the Chinese side.
Rebalancing or Retaliation? The Trade and Strategic Battleground
A top priority for the European Union remains securing access to rare earth elements, essential for many EU manufacturing sectors and clean technologies. The EU is critically dependent on China for about 98 percent of its rare earth supply. However, in April 2025, China introduced export restrictions on seven key rare earth elements and magnets.
These controls were aimed primarily at the United States but also severely impacted EU industries, causing a dramatic 84 percent drop-in rare-earth shipments to Europe in the first half of 2025 and disrupting vital supply chains for sectors including defense, automotive, and clean energy.
This year European Commission President Ursula von der Leyen publicly rebuked China at the G7 summit in Canada, accusing Beijing of employing “dominance, dependency, and blackmail” by weaponizing control over rare earth supplies—a critical component in global high-tech manufacturing and clean energy technologies[. This strong rhetoric elicited sharp condemnation from China amid already fraught relations.
The broader trade conflict extends beyond raw materials. In 2024, the EU imposed 45 percent tariffs on Chinese electric vehicles (EVs) to counter unfair competition resulting from China’s subsidized overcapacity, which allowed a rapid influx of cheap EVs into European markets, threatening the bloc’s domestic auto industry.
Similar issues plague other sectors such as solar panels, wind turbines, and steel. China retaliated with anti-dumping probes and tariffs against European exports, notably targeting €1.75 billion worth of pork—a significant market segment and imposing duties on European brandy
A dedicated EU import surveillance task force reported an 8.2 percent rise in Chinese exports to the bloc following the introduction of punitive U.S. tariffs under the Trump administration, which exacerbated tensions by encouraging trade diversion into Europe. The EU further responded to limited access to public procurement in China by invoking its International Procurement Instrument (IPI) to restrict Chinese participation in EU medical technology tenders exceeding €5 million.
Together, these factors have contributed to the EU’s massive trade deficit with China, which fluctuated around €400 billion in 2022 and nearly €300 billion in 2023 amid dynamic trade flows. Data from early 2025 indicates a 7 percent rise in Chinese exports to Europe while imports from Europe to China fell by 6 percent. Each side now pushes for concessions leveraging their economic strengths, with China reportedly seeking to replace EV tariffs with price-commitment agreements, while the EU demands more balanced and fair-trade terms
Beyond trade, geopolitical concerns sharply escalate EU unease. Europe’s alarm has deepened over Beijing’s tacit backing of Russia’s war effort through supplies of dual-use technology and substantial energy imports, coinciding with the deepening of the Russia-China “no limits partnership”. Xi Jinping’s multiple visits to Moscow, including as a guest of honor at Russia’s 2025 Victory Day parade, symbolize these tight ties.
Chinese Foreign Minister Wang Yi’s statement that Beijing does not want Russia to lose the Ukraine war—fearing US refocus on China—heightens European fears. Chinese cyber-attacks targeting European institutions and expanding military activities in the Indo-Pacific further unsettle Brussels, which in turn has increased its engagement in the Indo-Pacific and reaffirmed support for Taiwan, issues Beijing views with concern.
Adding to the EU’s internal challenges, member state divisions persist, with countries like Germany occasionally pursuing more conciliatory approaches toward Beijing, complicating unified EU policy. Beijing has exploited such cleavages through divide-and-rule tactics, leveraging varied national interests within the European bloc.
German Chancellor Friedrich Merz’s upcoming China visit with a business delegation will be a critical test of EU cohesion. In a rare positive development, tit-for-tat sanctions imposed against European Parliament members and analysts in 2021 were recently lifted, though ratification of the stalled EU-China Comprehensive Agreement on Investment (CAI) remains frozen, reflecting continuing distrust and unresolved irritants.
Against this backdrop, the EU-China summit revealed persistent friction but also tentative steps toward accommodation. Ursula von der Leyen highlighted progress on China’s fast-tracking of export licenses for rare earths and the establishment of an upgraded export supply mechanism aimed at promptly resolving bottlenecks. However, she insisted on the necessity of significantly rebalancing trade relations to address the €360 billion trade deficit and ensure market fairness.
Trade was a key battleground at the summit:
The EU accused China of maintaining a rigged economic relationship, citing unfair subsidies and overproduction, especially in renewable energy and EV sectors.
China urged the EU to refrain from “restrictive economic and trade tools,” defended its export restrictions on rare earths as consistent with international norms, and showed a willingness to increase market access and cooperation to repair trust.
European leaders demanded concrete progress to establish a more balanced, reciprocal, and mutually beneficial trade partnership.
Meanwhile, the shadow of U.S. tariffs loomed large. President Trump’s threat to impose 30 percent blanket tariffs on EU imports unless a trade deal was reached by August 1 initially gave China hope to exploit transatlantic divisions by courting Brussels as an alternative partner. Yet reports of an imminent U.S.-EU agreement on 15 percent tariffs undermined Beijing’s leverage. Analysts observe China’s strategic “hardball” tactics banked on U.S. unilateralism fracturing transatlantic unity, but the emerging accord between Washington and Brussels limits Beijing’s diplomatic gains.
50 Years: Celebration or Contestation?
Marking half a century of diplomatic ties, both sides issued warm words but seldom hid their mutual suspicion. Chinese President Xi insisted the “challenges facing Europe do not come from China,” and Chinese officials have refused to label the EU as a “systemic rival,” even as Brussels has done so for Beijing. Still, both governments admitted that mutual trust is at an all-time low.
The climate joint statement and pledges of cooperation on energy and carbon reduction were among the few productive outcomes. Yet, hopes for a celebratory mood were replaced by unmistakable chilliness—amplified when routine trade meetings preceding the summit were canceled.
The Future: Reset or Rupture?
Both sides acknowledged that EU-China ties are now at a pivotal crossroads. Von der Leyen said “We have very frankly and openly raised our concerns…on the trade, investment and geopolitical issues… We have partially identified solutions.” Xi Jinping Reiterated the need for “deeper cooperation” but pressed the EU not to follow Washington’s path, and to avoid “wedge-driving” on global order.
Despite the tense exchanges, Beijing appears open to commercial concessions, signaling a willingness to revisit export restrictions and boost cooperation in select areas. Yet, as political science experts warn, China’s doubling down on Russia and tough stance on trade may ultimately “push the bloc too far” and harden European resolve for countermeasures.
Fifty years after formalizing diplomatic relations, the EU and China stand at a crossroads marked more by open contestation than celebration. Von der Leyen’s anti-Russia stance and trade hardball may have been aimed to signal Europe’s resolve, but in Beijing, it sparked a backlash—one that laid bare the deep and growing divisions shaping this pivotal global relationship. The summit, instead of marking unity, became a symbol of the “inflection point” now confronting both sides as they navigate competition, suspicion, and the search for a new balance in the global order.
