EU and China launch new dialogue to head off trade war

The European Union and China have agreed to set up a new high-level consultation mechanism to manage rising commercial tensions and tackle the bloc's widening trade deficit with Beijing. EU Trade Commissioner Maroš Šefčovič announced the creation of the Trade and Investment Consultation Mechanism after meeting Chinese Commerce Minister Wang Wentao in Brussels. The platform will be divided into four main categories: trade and investment balancing, export controls, intellectual property rights, and World Trade Organization reform. A working group dedicated to the first topic will be launched immediately and will establish a joint mechanism to monitor trade flows. Šefčovič said the idea is to share a set of data that both sides can agree on, so that any destabilizing spikes in imports can be addressed at the political level. He welcomed Wang's assurance that China's existing export controls on rare earths and permanent magnets won't disrupt EU supply chains. The two sides issued a joint statement on the topic, the first since 2019, though Šefčovič briefed reporters alone after the bilateral. EU leaders had earlier signaled they expected expedient action. Šefčovič plans to visit China in October, hoping to present first tangible results. A roadmap with expected deliverables is due in the coming days, with a first assessment of progress expected in September.