The European Union is increasingly changing the language it describes with China. Climate cooperation, multilateral trade, green transformation and "de-risking", i.e. reducing risks without breaking economical ties, has been the most popular subject in Brussels recently. Now the same concepts are set out by European politicians in a much tougher form. Climate becomes a tool of trade policy, trade — an component of economical security, and green transformation — a field of fierce industrial competition.
According to South China Morning Post, EU leaders who met in Brussels on Thursday 18 June discussed a fresh strategy for China under the heading "global macroeconomic imbalances and their impact on Europe's competitiveness and prosperity". Sounds technocratic, innocent. But that's the full point of it. In EU diplomacy, China is increasingly spoken of without saying the word "China". Not due to the fact that the problem is marginal. On the contrary, due to the fact that it is besides large, besides politically sensitive, and besides hard to apply simple solutions.
On the 1 hand, Europe does not want an open confrontation with Beijing. On the another hand, it is increasingly hard to pretend that the existing cooperation model is working. Chinese exports are no longer exclusively associated with inexpensive everyday products. It is increasingly about electrical cars, batteries, photovoltaic panels, machines, medical devices, electronics, industrial components and the full segments of the green economy. So precisely the sectors on which Europe would like to base its future competitiveness, in a declarative manner.
New key word: imbalance
Official data from the European Commission show the scale of the problem. The bilateral trade in goods between the EU and China amounted to around EUR 732 billion in 2024. China remains the second partner for the Union in trade in goods in the United States. At the same time, the EU deficit in commodity trade with China increased in 2025 to EUR 355.9 billion. Brussels exported goods to China for EUR 199.5 billion and imported goods from China for EUR 559.5 billion.
In practice, this represents a deficit of almost EUR billion per day.
Such figures do not in themselves have yet to signify a crisis. global trade is seldom perfectly symmetrical. The problem is that the trade deficit coincides with the fear of losing an industrial base. If Europe imports more and more advanced products and at the same time loses the ability to produce them competitively, then the issue of trade balance ceases to be just statistics. It becomes a question of the future of factories, jobs, technologies and political influence.
Therefore, the concept of China's "overcapacity" (sic!) is increasingly emerging in Brussels. Beijing powerfully rejects them. Chinese officials answer that if competitive exports from China are called ‘overproduction’, European exports of cars, wines, cosmetics, medicines or luxury goods could equally be considered overproduction. This argument, which is highly rational, especially in the case of Germany, which may not have cared about budget spending for decades on exports to China, is not accidental. China is trying to show that the dispute is not about economical objectivity but about political viewpoint.
When Europe has the advantage, we talk about quality, branding and free trade. erstwhile China is given the advantage, subsidies, systemic risks and the request to defend the marketplace are increasingly mentioned.
This does not mean that European concerns are unfounded. The state model of manufacture support, access to cheaper funding, the scale of the interior market, local support programmes and the ability to build full production ecosystems have given China an advantage that European companies cannot easy meet. The problem is that Europe has utilized these advantages for years as a consumer, importer and investor. It now discovers that the account is besides issued to European producers.
The duties on cars were just the beginning
The most visible field of dispute was electrical cars. The European Commission has already started anti-importation of Chinese EV cars, pointing to subsidies and unequal conditions of competition. On China24.com we wrote about this more broadly in the text ‘Karne’ customs duties on Chinese electrical cars, noting that a European reaction can hit not only Chinese brands, but besides European consumers and Western car companies in China.
Today, you can see that this dispute was a beginning alternatively than an exception. The European Union is investigating the limits of its own protection policy. On the 1 hand, it wants to halt the influx of cheaper Chinese products in strategical sectors. On the another hand, it cannot afford to be completely cut off from Chinese supplies due to the fact that many branches of the European economy are inactive dependent on them.
This is why the EU papers so frequently include the "de-risking, not decoubling" formula. It's not about breaking ties with China, it's about reducing risks. Sounds reasonable. Only that in practice this task is much more hard than may be due to unspeakable political declarations. We already wrote about the world's dependence on Chinese supply chains in the text “China and the remainder of the world, or who is dependent on whom”. That problem didn't disappear. On the contrary, it has become even more visible in many industries.
At the same time, Europe would like to reduce its dependence on China, keep inexpensive imports, defend its own industry, accelerate green transformation and not provoke a trade war. Each of these objectives can be understood separately. Together, however, they form a strategy of contradictions that is hard to come out without costs.
The climate is no longer neutral
The fresh component of this puzzle is the climate. Over the years, the climate policy of the European Union has been presented primarily as an environmental and civilisational project. Europe was to set standards, reduce emissions, advance clean technologies and encourage others to follow the same path. Today, these standards are besides becoming an economical tool.
The best example is CBAM, a mechanics for adjusting prices at borders, including CO2 emissions. The European Commission describes it as an instrument to prevent "emission escape", that is to say, transferring production to countries with weaker climate regulations. As of January 1, 2026, CBAM operates in the mark phase. Importers of circumstantial goods must declare emissions embedded in the products and redeem an appropriate number of certificates. The mechanics includes cement, steel, aluminium, fertilizers, electricity and hydrogen.
From a formal point of view, CBAM is not directed solely at China. For all EU exporting countries, goods from the sectors covered by the mechanism. But in practice it is hard to separate it from the Chinese context. China is the world's largest industrial maker and 1 of the most crucial suppliers of goods for Europe. If CBAM is expanded to further products, especially more processed, its importance for Chinese exporters may increase.
The American CSIS centre points out that the European mechanics is already affecting the way China is reasoning of reporting emissions and carbon footprint management systems. In another words, even if Beijing criticizes CBAM as protectionism in green packaging, it must be taken into account. The European marketplace is besides crucial for Chinese companies to simply ignore it.
There's a paradox here. The European Union wants to be a climate leader, but the more its regulations affect imports, the more they become part of trade policy. From the position of Brussels, it is simply a defence of fair competition. From Beijing's perspective, a barrier to products that are frequently cheaper and more technologically advanced. So both sides can talk about climate, with manufacture in mind.
Europe seeks tools but fears its own weakness
According to the SCMP, EU country leaders were to ask the European Commission to prepare fresh trade instruments to counter the effects of Chinese overproduction and to force greater diversification of supply in critical sectors. However, formal conclusions were not adopted. It's an crucial detail. Europe wants to send a signal that it plays hard, but does not want to compose besides much black and white.
The reason is simple: associate States do not have the same interests. China is seen differently by countries with a large automotive industry, otherwise with ports and economies surviving from trade, otherwise by countries most afraid of losing their own factories. Germany, Spain or Greece have different calculations than countries demanding a sharper response. The Commission can talk the language of strategical autonomy, but decisions proceed to be made in the Union, which is simply a community of 27 different economies and 27 different political sensitivity.
The Chinese side understands that perfectly. Beijing has repeatedly shown that it can respond selectively: hit circumstantial products, industries or countries that play a peculiar function in the European debate. In the background of disputes over electrical cars, Chinese actions have already arisen against French cognac, Spanish pork or European cars with large-capacity combustion engines. It's not a random directory. This reminder that any European movement can have a political cost distributed unevenly between associate States.
Europe seems to have learned from the United States the language of hard trade policy. Only that active supporters of Washington's function in relations with China seem blind and deaf to the effects of the 2018 trade war, as well as to the zeal with which major American businessmen want to make formal and informal relations with Beijing.
Moreover, Brussels must take account of the interests of many countries in decision-making processes, consult legal mechanisms, guarantee WTO compliance and face interior opposition. This makes the European consequence slower, more cautious and frequently little readable. Or possibly it just doesn't make any sense. European hawks want to do what has not been successful for Americans, but even worse.
Chinese immunity is not a coincidence
From a Chinese perspective, the current European debate is in a broader picture. Beijing has been preparing for years for a planet little friendly to Chinese exports. Customs war with the United States, technological constraints, force to diversify supply chains and increasing protectionism in developed countries were not a temporary episode for China. They became an environment to which the economy began to adapt.
On China24.com we wrote about this in the text China prepared for US customs war: a strategy of self-sufficiency and diversification. The key proposal remains valid besides in relations with Europe: China no longer bases its position solely on 1 market. As force increases in the United States, ASEAN, Europe, Latin America, the mediate East and Africa are more important. If 1 channel of trade is hampered, others appear.
That doesn't mean China's insensitive to pressure. The fall in orders, tensions in the manufacturing sector, youth unemployment, weaker home request and real property marketplace problems show that the Chinese economy has its own limitations. However, the export opposition of the mediate States is greater than many Western politicians had assumed. A good example was the increase in Chinese exports despite American customs, as we wrote in the text Chinese exports resistant to US duties.
Europe must so anticipate that the duties themselves or the fresh procedures will not halt Chinese competition. They can slow it down, change trade routes, rise prices, force the location of part of production in Europe or 3rd countries. But they won't replace industrial strategy. And it is precisely the industrial strategy that Europe needs most.
A fresh stage, not a momentary dispute
Not a single article in the SCMP is the most crucial summit in the current debate. More importantly, EU-China relations are entering a fresh stage. For years Europe wanted to see the market, supplier and climate partner in China. Then she started talking about China as a rival and a systemic rival. Now these 3 roles overlap in practice.
China is vitally needed present for the European economy. Europe is inactive crucial for Chinese exports. Both sides request climate cooperation, due to the fact that without China, we cannot seriously talk about global emissions reductions. At the same time, both parties increasingly respect climate, trade and technology as elements of the same gameplay.
However, it is clear that the European strategy towards China, created by people at the same time very emotional, as incompetent, and playing mainly under their own local public (elections, elections), will become increasingly contradictory. Brussels will talk about dialog while preparing fresh "protective tools". It will declare its commitment to free trade and at the same time limit marketplace access in strategical sectors. It will item the importance of green transition, but usage climate mechanisms to defend its own industry. Beijing will discuss openness and globalisation in a context, defending a model which itself relies on the strong function of the state, selective marketplace access and long-term industrial policy.
Europe does not want a trade war with China, but it is becoming little and little compatible with the realities of moving the industrial centre of gravity of the planet to Asia. Without an thought on its own, without a real, planned strategy, consistently implemented reindustrialisation, it can only put on a stack of cards, or formal barriers. China, on the another hand, does not want to lose the European market, but does not intend to quit the advantages they have built for decades.
Can Europe defend its own industrial base without cutting itself off from an economy on which comfort and greed depend? After all, China was expected to work for inexpensive money and profits were to go to Europe. It's been like this for years. abruptly something changed. Why?
Is Europe able to accept that things have been good, and now we gotta get to work? Heavy, ungrateful, not necessarily well paid at the beginning?
Is it? Are we?
Sources
- South China Morning Post, "Climate change, trade battlelines draw in Europe's fresh China strategy", https://www.scmp.com/news/china/diplomacy/article/3357388/climate-change-trade-battlelines-draw-europes-new-china-strategy
- South China Morning Post, "EU leaders ask Brussels to come up with fresh trade weathers to counter China shock", https://www.scmp.com/news/china/diplomacy/article/3357652/eu-leaders-ask-brussels-come-new-trade-weapons-counter-china-shock
- European Commission, EU trade relations with China, https://policy.trade.ec.europa.eu/eu-trade-relationships-country-and-region/country-and-regions/china_en
- European Commission, Carbon Border Adjustment Mechanism, https://taxation-customs.ec.europa.eu/carbon-border-adjustment-mechanism_en
- CSIS, ‘The fresh Carbon Order: China’s consequence to Europe’s CBAM’, https://www.csis.org/analysis/new-carbon-order-chinas-response-europes-cbam
- State Council Information Office of the People's Republic of China, message by the Ombudsman of the Ministry of Trade of the PRC, http://english.scio.gov.cn/pressroom/2026-05/22/content_118507973.html
- EUobserver, "EU leaders to choice from menu of anti-China trade means over summit diner", https://euobserver.com/222436/eu-leaders-to-pick-from-menu-of-anti-china-trade-measures-over-summit-dinner/
- Eunews, ‘Competitiveness, EU leaders research fresh anti-China tools with no conclusions and without commenting Beijing’, https://www.eunews.it/en/2026/06/19/competition-eu-leaders-explore-new-anti-china-tools-with-no-conclusions-and-without-mentioning-beijing/
Leszek B. Glass
Email: [email protected]
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