Intensive China-EU Consultations Hit Deadlock; EU's "Talk While Striking" Approach Risks Sharp Escalation in Friction
Claire Weston
This week's intensive China-EU consultations produced no substantive progress on EV price commitments, rare-earth export controls, or steel tariffs, while Brussels simultaneously expanded its trade-defense toolkit — pushing bilateral friction from isolated disputes toward systemic confrontation.
What was on the table? All three core issues stalled
EV price-commitment talks made no new progress; Chinese automakers' export-pricing proposals remain unresolved.
On export controls, the EU demanded China address rare-earth concerns but made zero movement on cases where Chinese imports from the EU are blocked. This means → the export-control track was a one-way ask, not a two-way exchange.
In steel-tariff concession talks, the EU barely responded to Chinese demands — even though the measures hurt China far more than the average affected country.
What did the EU do outside the negotiating room?
Under its Foreign Subsidies Regulation — a framework checking whether foreign government subsidies distort the EU market — Brussels has formally launched nine investigations into Chinese companies, raising the investment barrier for Chinese firms entering Europe.
The European Commission is also planning tariffs on Chinese plug-in hybrid vehicles, widening the target from pure EVs to hybrids.
ECB President Christine Lagarde publicly urged world leaders to discuss renminbi undervaluation, escalating the currency dispute to a multilateral stage.
In plain terms = the EU is sitting at the negotiating table while adding pressure outside it — the talks themselves place no constraint on EU action.
What does 'talk and strike' actually mean?
The EU side stated explicitly during consultations: bilateral talks will not affect the bloc's plans to deploy existing trade tools or develop new ones.
This means → the negotiation window and the pressure campaign run in parallel; Beijing cannot trade "sitting down to talk" for a European pause on action.
Jian Junbo, director of the Centre for China-EU Relations at Fudan University, said bluntly: the EU's approach of "ignoring China's core concerns while trying to talk and strike at the same time is wrong and will never work."
What countermeasures is China preparing?
Jian noted that the US-China trade war proved Beijing's resolve is firm and its countermeasures are effective.
Facing what he called EU provocation, China can deploy specific tools including anti-discrimination probes, supply-chain security reviews, and restrictions on EU products where Europe holds an advantage.
According to the Global Times, Beijing remains committed to dialogue but is ready to retaliate decisively at any time.
Does the EU speak with one voice?
No. Germany's government is internally split on whether to force companies to restructure supply chains; France has long pushed a harder line.
Yet Commission President Ursula von der Leyen was unambiguous: the EU has built a broad toolkit and "must now use it more proactively and strategically to defend European interests."
This reflects a deeper reality — despite internal disagreements, the EU's overall policy direction is still tightening. The "diversification instrument" and sectoral-tariff plans in preparation are the signal.
How stark is the trade-deficit picture?
Eurostat data show the EU's 2025 goods trade deficit with China reached €360 billion for the full year.
In April alone, the deficit hit €31.9 billion — more than €1 billion per day.
This means → these numbers are becoming the Commission's most direct ammunition for accelerating trade-defense reform — a daily €1 billion deficit carries enormous political force in the European context.
Content is for reference only, not financial advice.