European Union leaders convened in Brussels on Thursday to address the future of trade relations with China amid growing concerns over the impact of China's expanding exports on European industries. The surge in imports, particularly of manufactured goods such as cars, has raised alarms over potential job losses and the sustainability of the EU's trade deficit with China.
The two-day summit covers a broad agenda, including discussions on the war in Ukraine, recent developments such as the U.S. diesel deal with Russia, Middle East affairs, defense cooperation, migration, the EU’s multi-year budget, and the ongoing expansion of the 27-member bloc.
Amid domestic challenges, several key EU leaders are under political pressure. French President Emmanuel Macron faces student protests and fiscal setbacks after losing his parliamentary majority in 2024, while German Chancellor Friedrich Merz is experiencing difficulties consolidating his coalition following regional electoral defeats. Spanish Prime Minister Pedro Sanchez, who advocates for a more conciliatory stance toward China to attract investment, is approaching a snap election on November 29 with trailing poll numbers. In contrast, Polish Prime Minister Donald Tusk and Italian Prime Minister Giorgia Meloni enter the summit with stronger political footing, despite Italy grappling with rising inflation and energy costs.
A central focus of the summit is the growing EU trade deficit with China, which reached €360 billion ($402 billion) last year and already totaled €200 billion in the first half of 2026. European Commission President Ursula von der Leyen characterized the deficit as “unsustainable” and vowed to deploy all available tools to address the imbalance. Unlike previous efforts centered on improving market access for European companies in China, the EU’s strategy has pivoted toward limiting Chinese exports entering the bloc.
French and German officials have jointly proposed new measures aimed at curbing imports, particularly in sectors such as machinery, textiles, basic metals, chemicals, and automobiles. The Franco-German initiative calls for urgent action to restrict imports of chemicals and polyethylene terephthalate (PET), a widely used plastic in packaging, as well as strategies to reduce reliance on single suppliers for critical materials. The paper also advocates for prompt responses against countries that negatively affect the EU’s economic interests.
European Trade Commissioner Maros Sefcovic described a recent preliminary agreement on Chinese hybrid car imports as a positive but initial step in a broader effort to rebalance trade ties. EU leaders are expected to instruct the European Commission to maintain dialogue with Beijing while evaluating the need for additional trade measures. However, senior Commission officials have indicated that talks alone are unlikely to resolve the underlying issues.
The summit's discussions mark a notable shift in Germany’s approach, moving away from previous opposition to EU tariffs on China-built electric vehicles toward supporting protective trade measures—aligning with France’s more interventionist position. Analysts have described this as a significant policy turnaround that underscores a shared resolve by the EU’s two largest economies to address what has been termed the “second China shock.”
Beyond trade, the summit will also explore challenges related to migration, defense collaboration, and the EU’s future enlargement as leaders seek to navigate both internal pressures and external geopolitical complexities.