EU trade chief Maroš Šefčovič is in Beijing for two days of talks, meeting China’s commerce minister, Wang Wentao, on Thursday and Friday. The timing looks odd: France and Germany are pressing for new defences against Chinese goods. So why does Brussels still negotiate?
What is happening in Beijing?
This is the second session of the EU-China Trade and Investment Council, a dialogue the two sides launched in June. Šefčovič set October as the deadline for “tangible results”, and both sides agreed to monitor trade flows jointly.
The numbers explain the urgency. China’s goods surplus with the bloc hit a record €360.6bn in 2025 and widened by a further 10 per cent in early 2026. The gap now exceeds €1bn a day.
Why hold talks when capitals want barriers?
Four reasons stand out.
First, EU leaders asked for dialogue. In June, they told the Commission, which handles trade policy for all 27 members, to tackle the dispute through talks while preparing stronger trade defences in parallel. Šefčovič has warned that failure in Beijing would push leaders towards “other instruments”. Talks and threats therefore work together.
Second, China holds leverage. It dominates the production and processing of rare earths, on which European carmakers, defence firms and green-technology makers depend. When China halted those exports a year ago during its trade war with Washington, some European carmakers suffered production delays and shutdowns. A one-year pause on sweeping Chinese export controls expires on 10 November, and some German companies are reportedly stockpiling in case the talks fail.
Third, Europe fears retaliation. Earlier EU trade measures drew Chinese duties on cognac and probes into pork and dairy. Beijing now promises a “resolute response” to any new restrictions.
Fourth, the bloc lacks unity. France favours confrontation. Germany long counselled restraint because of its exposure to China, though Berlin has since hardened. Spain prefers a pragmatic line as it seeks Chinese investment. Dialogue is the one course every capital can accept.
What does Brussels want?
The Commission raises three issues: surging Chinese exports, access to China’s market and rare-earth controls. It wants Beijing to limit some exports voluntarily.
Cars top the list. The EU’s 2024 tariffs covered battery cars but not hybrids, and monthly Chinese hybrid exports to the EU jumped from 3,800 to roughly 50,000 within two years. Brussels proposed a ceiling of about 15 per cent of the EU market. The Commission’s trade enforcement chief also reports abnormal rises in machinery, textiles, basic metals and chemicals.
Commission President Ursula von der Leyen says a “second China shock” has already arrived, and reports of planned lay-offs at Volkswagen have sharpened that fear. American tariffs add to the strain: EU diplomats say tighter access to the US market has worsened the deficit. Market access is a slower project, and Šefčovič concedes it will take longer than October.
What does Beijing say?
China rejects the charge of overcapacity. Its commerce ministry calls such talk a form of protectionism and insists that Brussels should not treat China as the root of Europe’s problems. Beijing also objects to the EU’s “Made in Europe” plan, which would favour European-made products.
Beijing has rejected voluntary limits on hybrid exports, so the Commission now hopes China will accept a unilateral EU cap instead. China counts 28 EU trade investigations against its products since 2025. Brussels recently opened three investigations into Chinese chemicals, and on 3 October Beijing opened an anti-dumping probe into a European chemical.
What happens next?
EU leaders meet in Brussels on 15–16 October, with China at the top of the agenda. Emmanuel Macron and Friedrich Merz have urged a rapid-response instrument against countries that harm the bloc economically. Their proposal names no country, but German officials want a tool as powerful as America’s Section 301 tariffs.
If Beijing offers little, Germany and France could push for a cap on Chinese hybrids, European preference in public procurement and tighter limits on Chinese takeovers. The Commission plans to present more trade tools, probably in December, including one to help firms reduce their reliance on Chinese critical minerals.
On Wednesday, the European Parliament backed a more assertive China policy in a non-binding resolution. In September, G20 finance leaders, except China’s, agreed to act against “non-market” distortions. Europe is also hedging, having signed trade deals with India, Australia and Indonesia over the past year.
Expectations remain modest, and European trade experts predict an “underwhelming” visit. Bernd Lange, who chairs Parliament’s trade committee, believes concrete results remain possible. The talks therefore serve two purposes: they test whether Beijing will concede anything of substance, and they may strengthen the case for barriers if it refuses.
