EU Summit Discusses Trade Measures Against China as Germany and France Join Forces to Reduce Trade Deficit
nashnova research
EU leaders meeting in Brussels made China trade their top agenda item, with last year's €360 billion goods deficit declared "unsustainable"; a joint Franco-German policy paper marks a decisive shift in Europe's stance, and the first concrete restrictions could land as early as December.
How big is the €360 billion problem?
The EU's goods trade deficit with China hit €360 billion (≈$402 billion) last year. In the first half of 2026 it already reached €200 billion.
This means → at the current pace, the full-year gap is on track to set another record — the imbalance is accelerating, not closing.
A surge in Chinese autos and manufactured goods is threatening European industry head-on. Volkswagen has announced 100,000 job cuts, turning a trade-balance number into a labour crisis.
Commission President Ursula von der Leyen labelled the deficit "unsustainable" and pledged to deploy every available tool to bring it down.
Why did Germany suddenly flip?
France and Germany jointly submitted a policy paper proposing specific import restrictions on chemicals and PET plastics, calling for reduced dependence on single-source critical supplies.
In plain terms = Germany was the most vocal opponent of EU tariffs on Chinese electric vehicles. Now it is co-authoring the paper that demands import curbs — a 180-degree turn.
Sander Tordoir, chief economist at the Centre for European Reform, said: "Berlin's policy shift had been building beneath the surface for weeks and months; now it has formally surfaced."
This reflects a consensus between the EU's two largest economies on how to handle the "second China shock" — the debate has moved from *whether* to restrict to *how*.
Dialogue or restriction — what is the EU's actual plan?
Trade Commissioner Maroš Šefčovič called the preliminary deal with China on curbing plug-in hybrid imports a "very good outcome," but warned it was only the first step in a broader rebalancing.
A senior Commission official stated plainly: dialogue alone cannot finish the job. The summit is expected to instruct the Commission to keep talking while studying further measures.
This means → Brussels is running a "talk and restrict in parallel" playbook — negotiations will continue, but restrictions will not wait for them to conclude.
December is the key date — what should you watch?
The Commission could propose its first concrete restrictions as early as December, even if this week's summit opts to maintain the dialogue track.
The EU's trade-policy centre of gravity has shifted from "getting European firms *into* China" to "keeping Chinese goods *out of* the EU" — spanning autos, machinery, textiles, base metals, and chemicals.
In plain terms = Europe used to ask "how do we sell more to China?" Now it asks "how do we stop China selling so much to us?" — offence and defence have completely switched sides.
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