European Trade Commissioner Maroš Šefčovič begins two days of talks in Beijing on Thursday, seeking tangible commitments from China to address a trade imbalance that has become an increasingly urgent concern for European industry. His meetings with Chinese Commerce Minister Wang Wentao come just a week before the October 15–16 European Council, where relations with Beijing will feature prominently.
The stakes extend beyond the EU’s trade deficit, now exceeding €1 billion a day. France and Germany have proposed stronger instruments to allow Brussels to respond rapidly to systemic threats to European industry, including the possibility of restricting access to the single market. Yet the Commission remains keen to find a negotiated solution rather than enter into an escalating confrontation with Beijing.
For Andrew Small, director of the Asia Programme at the European Council on Foreign Relations (ECFR), the significance of this moment lies in a political shift that has been years in the making.
“The consensus for European action on China is finally in place after Germany’s caution had long held back a more robust EU approach,” Small says. “The recent Franco-German proposals ahead of the October European Council, for the EU to act much faster against systemic trade threats is even more important for the political mandate it provides than for the details of what it proposes.”
- That emerging consensus is also visible in the European Parliament, which has called for a broader reassessment of relations with Beijing, encompassing economic dependencies and security concerns. As Decode39 reported, the debate has also exposed divisions within Italy’s political opposition, with most Democratic Party lawmakers abstaining on the latest parliamentary report.
But can the new European consensus survive negotiations with Beijing?. Small sees the Šefčovič mission as an immediate test of Chinese intentions, particularly whether Beijing is prepared to offer concessions capable of addressing the structural causes of Europe’s industrial concerns.
- “The Sefcovic talks in Beijing will determine whether China is willing to put sufficiently serious offers on the table, and whether those offers are substantial enough to change the underlying dynamics,” he says.
- His concern is that Beijing may instead attempt to draw Brussels into what he calls a “process trap”, making limited concessions sufficient to postpone European action without addressing the forces contributing to European deindustrialisation.
Such an approach could also exploit differences among EU member states, particularly within Germany, where the political consensus has only recently shifted.
- Small identifies several possible Chinese tactics: voluntary export restraints in sensitive sectors such as hybrid vehicles, purchasing commitments, previously planned industrial capacity reductions presented as fresh concessions, and new dialogues on contentious issues including currency valuation.
- These measures, he suggests, could weaken the sense of urgency in European capitals without fundamentally changing the economic relationship.
What happens if the talks produce little progress? Small believes Brussels would then have to translate its political mandate into a coordinated defensive strategy, using the trade and economic instruments already available rather than waiting for new legislation.
- “If the Sefcovic talks fail or – more likely – deliver so little that the European consensus for urgent action holds, the EU will have to move forward with a defensive effort to protect the industries most exposed to the China shock, which mobilizes all the existing tools at its disposal.”
- The proposed new instruments will take time to negotiate. Small therefore advocates a more concerted deployment of existing measures, an approach he has described in a recent ECFR paper as a “swarm” of interventions.
- “This includes tariffs and quotas, but Europe has to go well beyond traditional trade defence instruments, which can only achieve so much given China’s capacity to swallow and circumvent them.”
Would this amount to a European version of Washington’s trade war with China? Small rejects the comparison. Europe’s objective, he argues, is to defend vulnerable industrial sectors rather than pursue the sweeping tariff escalation seen between Washington and Beijing.
- “The EU’s moves will not look like the US-China trade war, and the comparison is misplaced,” he says. “The EU will not put embargo-level tariffs in place, à la the 145% tariffs Trump imposed last year, but will rather mount a systemic defence of industrial sectors it is in danger of losing.”
- Even under a more assertive policy, Small expects the European market to remain substantially more open to Chinese products than the American one.
That distinction matters when considering Beijing’s possible response. A Chinese decision to restrict critical supply chains would, in Small’s assessment, represent a major escalation rather than a proportionate reaction to European defensive measures.
- Unlike in the US-China confrontation, where Chinese export controls helped push Washington towards de-escalation, similar pressure on Europe could reinforce support for tougher action. Small believes this could ultimately trigger the EU’s anti-coercion instrument and further countermeasures.
- Nevertheless, he does not consider escalation inevitable. “In practice, the EU can live with limited retaliation and China can live with a lot of what Europe is proposing to do, so there is still a potential negotiated landing zone for both sides.”
The longer-term challenge goes beyond the October summit. For Small, Europe needs a durable framework capable of addressing Chinese industrial competition across multiple sectors, rather than repeatedly responding to new waves of import pressure. Otherwise, the same vulnerabilities could emerge year after year in different parts of the European economy.
- “The immediate test, though, is whether the EU can navigate Beijing’s pressure and inducement tactics in the weeks ahead,” he concludes.
