EU seeks fairer trade with China
01/07/2026 1Europe and China were seeking to gauge whether trade frictions can be resolved, as top European Union (EU) trade official Maros Sefcovic hosts his Chinese counterpart Wang Wentao in Brussels for day-long talks.
The EU has turned its attention to China as Brussels frets over increasing trade imbalances between the 27-nation bloc and the Asian powerhouse. The issue is existential for the EU.
Brussels fears it will lose certain industries entirely if it does not act against a glut of inexpensive goods made in China threatening manufacturers in Europe.
Wang’s visit comes less than two weeks after EU leaders tasked the European Commission with tackling the issue through talks with Beijing – while simultaneously preparing beefed-up defence measures to protect key sectors.
“Busy agenda, substantive talks, clear purpose,” Sefcovic posted on X as he welcomed Wang for “a packed day of meetings”, culminating with a special dinner.
The EU trade chief was due to tell the Chinese minister that the current imbalances are unsustainable for the EU.
The bloc’s trade deficit in goods with China hit around EUR360 billion in 2025, meaning the bloc imported way more from the Asian giant than it exported there.
In turn, Wang will likely seek to understand how seriously the EU is threatening to deploy its trade defence armoury.
The bloc still hopes to avoid a trade war with its second-largest trading partner for goods alone, according to the European Commission – making clear it will retaliate against actions it views as unfair.
Europe insists on the need for a level playing field, pointing out that Chinese firms have an unfair advantage because of massive state subsidies.
The numbers support Brussels’ argument.
Between 2005 and 2024, Chinese companies received around three to eight times more government support than businesses in countries belonging to the Organisation for Economic Cooperation and Development (OECD), which called it “a conservative estimate”.
The EU already has an arsenal of trade defence tools it can use to address the issue. These include imposing higher tariffs if investigations prove that companies are selling goods at unfairly low prices or if there is state support that gives an unjust advantage to the manufacturers.
Brussels could also set restrictions known as safeguard measures – including quotas – if there is a sudden surge in imports. New measures are also likely on the way.
The commission, which leads EU trade policy, is working on an instrument that would force businesses to diversify their suppliers in critical sectors like chips and rare earths.
And French President Emmanuel Macron proposed in May a European “Section 301” – the trade tool United States President Donald Trump has employed to set higher tariffs for certain sectors after investigations.
The EU has taken several measures to confront soaring imports from China including doubling its duties on foreign steel, imposing higher levies on small parcels from abroad and hefty tariffs on Chinese-made electric vehicles.
Despite growing acceptance of the need to get tougher however, Brussels shows no appetite for a painful trade war.
The EU does not view this as empty threats: in previous retaliatory steps China slapped duties on European products and conducted anti-dumping probes into meat and dairy products. The warning weighs on EU capitals.
Germany has until recently been more cautious since it is more exposed to China’s economy, but the biggest supporter of a more pragmatic approach has been Spain as it seeks Beijing’s investment.
Although he echoed China’s warning of retaliation last week, Beijing’s Envoy to the EU Cai Run also urged dialogue as he told a Brussels audience the two sides were “partners, not rivals, and certainly not enemies”.
The relationship is significant for China too: the EU is its second-largest trading partner.
Source: Borneobulletin