EU sends envoy to Beijing as rising exports from China raise economic
anxiety
[October 08, 2026] By
SAM McNEIL and CHAN HO-HIM
BRUSSELS (AP) — The European Union is bracing for a confrontation with
China as a trade deficit exceeding $1 billion a day heightens anxiety
over potential job losses and pushes the bloc’s political leaders to
take a more aggressive approach toward its second-largest trading
partner.
The European Commission’s top trade envoy, Maroš Šefčovič, will be in
Beijing Thursday for a two-day meeting with Chinese Commerce Minister
Wang Wentao. The goal is narrowing the EU’s 360 billion euro ($410
billion) trade deficit with China. Earlier this year, he gave Beijing a
deadline of October to provide meaningful results in doing so.
Politicians and economists across the 27-nation bloc consider China’s
massive subsidies and exports a major threat to core industrial sectors
from steel foundries to car factories. China diverted many of its
exports to the EU and other markets after the U.S. raised tariffs.
In a debate Tuesday in European Parliament in Strasbourg, lawmakers
overwhelmingly expressed anxiety alongside defiance over trade with
China. On Wednesday, they voted 454 to 86 on a resolution to toughen up
on China that centered on a call for “economic reciprocity and a
proportionate EU response if China does not open its markets.”
Ahead of the vote, Hilde Vautmans, the Belgian lawmaker who led the
resolution, said that “Europe has economic power, it’s time we used it.”
EU options range from tariffs to a “trade bazooka”
Despite the seeming European unity this week, it remains unclear what
the EU can or is willing to do. It has already rolled out trade measures
against Chinese steel imports and e-commerce small parcels.
France’s High Commission for Strategy and Planning in February called
for swift action, like 30% tariffs on many of China’s exports, and a
devaluation of the euro against the Chinese currency. Sales of German
autos are plummeting in China, but China is also poised to gobble up
market share in Europe by undercutting European automakers on price
thanks to heavy state subsidies. There have already been mass layoffs at
major manufacturers like Volkswagen.
A letter by France and Germany, a copy of which was seen by The
Associated Press, called for a sweeping rethink of the EU’s China
policy. Among other actions, it proposed making it easier for the
European Commission to use the bloc’s so-called “trade bazooka,” the
Anti-Coercion Instrument. This is a never-used-before raft of measures
for blocking or restricting trade and investment from countries found to
be putting undue pressure on EU member nations or corporations.
Yet not all EU nations agree on such tough measures. Spain, the
eurozone’s fourth-largest economy, has been less adversarial toward
China in recent years. Prime Minister Pedro Sanchez has visited Beijing
four times in three years. Far-right and left-wing lawmakers from
Ireland to Bulgaria formed an unusual coalition on Wednesday to vote
against resolution calling for tougher China policies.
The European Policy Centre in Brussels said in June that European
battery producers, solar panels, steel, electric vehicles, chemicals and
machinery are already hemorrhaging jobs and capacity and called for a
trade investigative body modelled on Section 301 of the U.S. Trade Act.
European Commission President Ursula von der Leyen called the phenomenon
another “ China shock ” for Europe, similar to what happened in the U.S.
in the early 2000s when hundreds of thousands of factory jobs in the
American heartland were wiped out.
The EU’s ailing economy requires both a domestic overhaul and a more
aggressive foreign trade policy, especially with China, said Tim Rühlig,
a China analyst at the European Union Institute for Security Studies,
the bloc’s internal think tank.
Rühlig also said that European businesses and political leadership bear
some blame.
“It’s clear that just protecting yourself from China is not the future,”
Rühlig said. “But to have a chance of making yourself ready for future
technologies and to remain competitive in the coming 15-20 years, you
have to protect yourself.”
[to top of second column] |
The European Commissioner for Trade and Economic Security Maros
Sefcovic speaks during an interview in Asuncion, Paraguay, Jan. 17,
2026. (AP Photos/Jorge Saenz, File)
 It is impossible to disengage
completely with China as the EU did with Russia following its
invasion of Ukraine, Rühlig said, but there is robust momentum now
to reset trade relations with Beijing.
“Where do we make ourselves independent or at least more diverse?
And where do we still work with the Chinese?” Rühlig asked.
On Wednesday, U.S. Secretary of State Marco Rubio during his Greece
visit called for Europe to strengthen its alliance with the U.S. as
he urged Europe to “awaken from its long slumber."
Rubio said that Europe and the U.S. are at “a crossroads” where
actions taken now “will determine whether the West maintains its
place at the head of the world or resigns itself to a future of
atrophy and servitude and decline. We will either choose to act now
or lose the choice to act at all.”
China is ready for a long trade dispute
This week in Beijing, when asked about the letter penned by France
and Germany, a spokesperson at China’s Ministry of Commerce said
that the countries should refrain from encouraging the EU to resort
to protectionist measures.
“Protectionism cannot enhance competitiveness, and decoupling or
cutting off supply chains will only harm others without benefiting
oneself,” the commerce ministry said in a statement.
China is the EU’s second-largest goods trading partner after the
U.S., according to European Commission data. Chinese exports to the
EU rose 15.3% in the first eight months of this year, according to
China’s customs agency, while its imports from the EU rose 6.2%.
“The EU does not have the capacity to wage a trade war against
China,” read an editorial last month in China’s state-run Global
Times newspaper. “If it is truly determined to do so, then let it
try.”
China’s exports to Europe, as well as Southeast Asia, Latin America
and Africa, expanded after U.S. tariffs went into effect last year,
but it still booked a $1.2 trillion trade surplus globally in 2025.
So far, China’s export machine has remained remarkably resilient
despite U.S. tariffs and other trade restrictions, said Max Zenglein,
Asia Pacific senior economist at The Conference Board.
This past weekend, ahead of the meeting between Šefčovič and Wang,
China launched an anti-dumping probe on EU exports of p-nitrotoluene,
which is used in dyes and pharmaceuticals. The probe was initiated
after Beijing warned last month that it would take retaliatory
actions if the EU instituted tougher protectionist trade measures.
“China has been battle-tested by successive rounds of external
pressure and, so far, has largely stared down attempts to force a
change in course,” said Zenglein.
China’s economy has been largely driven by exports as domestic
demand remains sluggish. The EU imports sizable amounts of Chinese
lithium-ion batteries and hybrid electric vehicles, and Chinese
carmakers are also expanding production capacity in Europe.
While China’s trade surplus has intensified concerns among its major
trading partners, trade ties between the U.S. and China appear
relatively stable following a summit between Chinese President Xi
Jinping and President Donald Trump in Washington, wrote Bank of
America economists, turning the attention to China-EU relations.
When it comes to negotiations with the EU, Chinese investment in
Europe is likely to be among Beijing’s bargaining chips, Zenglein
added, particularly as EU member states compete to attract capital,
jobs, and new manufacturing projects.
___
Chan reported from Hong Kong.
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