EU braces for tense China talks amid trade disputes

EU leaders Ursula von der Leyen and António Costa are expected to meet Chinese President Xi Jinping this week as geographical tensions intensify. China’s perceived alignment with Russia on the Ukraine war has particularly become a point of contention with the EU.

The two sides will meet for summit talks in Beijing on Thursday. From the scheduled talks, some analysts hope the EU and China will draw closer and align on shared interests, especially since both face trade pressures under President Donald Trump.

The EU and China have been at odds with each other over trade policies and relations

The EU has reiterated its concerns about China. In the past few weeks, European Commission officials have warned about a surge of low-cost Chinese goods entering European markets. They have also criticized Beijing’s tightening grip on the rare earths supply chain. They also condemned China’s continued support for Russia amid the ongoing war in Ukraine.

The EU’s chief diplomat, Kaja Kallas, even commented, “China is the key enabler of Russia’s war in Ukraine.” She also argued that the EU is increasingly uneasy about China’s industrial overcapacity, skewed trade relations, and economic coercion, referencing its control over critical raw materials, chemicals, and consumer drones, adding that trade and security are connected.

China has pushed back against those concerns and even criticized the EU’s decision to raise tariffs on its electric vehicles last year, to which it responded with several trade investigations of its own into the EU. 

Moreover, in June, the EU decided to block Chinese firms from high-value public medical device tenders, and Beijing swiftly retaliated by curbing purchases of European-made equipment.

Then on Monday, China’s Ministry of Commerce lashed out at the EU’s latest Russia sanctions, which targeted two Chinese banks and other companies, warning the move would seriously damage economic and trade relations between the two sides.

So far, the EU has started over 25 trade defence investigations in the last year into Chinese products, targeting Chinese exports such as candles, sweetcorn, and vehicle tyres—nearly quadrupling the number from the year before.

Beijing is setting a positive tone ahead of the summit

Beijing is projecting optimism ahead of the summit, framing it as an exchange between two major powers advancing a multi-polar world, two markets supporting globalisation, and two great civilisations that value cultural diversity.

Analysts also see that Beijing is likely to tout the summit as a multilateral milestone, demonstrating that Europe is charting a more independent course from Trump’s United States. Nevertheless, the EU has maintained that it prioritizes the problematic China’s escalating trade surplus and alleged role in aiding Moscow’s war effort.

The summit was originally set in Brussels, but Xi turned down the invitation—an act EU officials viewed as a diplomatic affront. Brussels then later failed to attend an economic meeting in June.

When asked about expected summit results, one senior EU official stated that simply having an open dialogue with China is already a success. On the other hand, Abigaël Vasselier, head of the Foreign Relations team at the MERICS think tank in Germany, claimed that the world should anticipate a very challenging session and not exactly a “deal-making moment.” Se added that China, in the last few months, resorted to retaliation against Europe’s policies, saying the country has borrowed some of Trump’s tactics.

Chinese authorities have defended their positions in response to some of the EU’s concerns. On the issue of Russia, Foreign Minister Wang Yi argued that China does not want Russia to lose the war in Ukraine, fearing it would prompt a renewed US focus on China and the Asia-Pacific. Currently, 80% of all dual-use items destined for Russia are routed through China, which the EU insists is troubling.

Von der Leyen, the European Commission president, stated that most of its concerns about Beijing are unresolved. In a G7 meeting in June, she claimed China is weaponizing its monopoly on rare earth supply as a geopolitical tool to undercut rivals in critical sectors. 

Trump’s trade tariffs are also likely to influence the summit’s dynamics. Chinese authorities said they are looking for any indications that a prospective US-EU trade agreement might be aimed at isolating China economically.

Cryptopolitan Academy: Tired of market swings? Learn how DeFi can help you build steady passive income. Register Now