EU and China head into decisive trade talks in Beijing

The European Commission has set October as the deadline for achieving concrete progress with Beijing on rebalancing bilateral trade. High-level talks between EU Trade Commissioner Maroš Šefčovič and his Chinese counterpart Wang Wentao take place in Beijing this week, followed next week by an EU leaders' summit where China will top the agenda.

Industrial pressure and job losses

European officials warn that a surge of Chinese competition is hitting sectors central to the EU's industrial base, including pharmaceuticals, aerospace, automotive, machine tools and chemicals. EU Industry Commissioner Stéphane Séjourné has said 250,000 industrial jobs were lost last year alone, with thousands more disappearing weekly. The EU is also seeking reliable rare earth supplies from China, essential to its industry, after a 2025 export freeze; a truce on exports currently holds only until January 2027.

Germany shifts stance

Germany, which opposed EU tariffs on Chinese electric vehicles in 2024, has moved closer to France's tougher position. In a letter to Commission President Ursula von der Leyen, German Chancellor Friedrich Merz and French President Emmanuel Macron called for full use of existing trade defence tools and a new, faster decision-making mechanism that could allow swift action against Chinese market access, potentially including an immediate market cut-off. Spain remains among the most cautious member states on the issue.

Beijing's leverage

China holds a global monopoly on rare earth production and processing, giving it significant leverage in the talks. Beijing has already rejected a Commission proposal for voluntary export restrictions on EVs, insisting any solution must balance interests on both sides and comply with WTO rules. Last Saturday, China opened an investigation into alleged dumping of EU p-nitrotoluene, a move seen as pressure ahead of this week's talks, following EU probes into Chinese chemical and PVC imports.