EU Prepares Tougher Trade Tools Against China as Deficit Nears 360 Billion Euros

The European Union is preparing new trade measures against China amid a widening bilateral deficit and growing competition for European industry, while signaling it wants to preserve dialogue with Beijing. RBC, citing the South China Morning Post, reported that Brussels is preparing measures to address the imbalance without ending engagement. On June 29, EU Trade Commissioner Maroš Šefčovič met Chinese Commerce Minister Wang Wentao, and the two sides agreed to four negotiating tracks covering trade and investment balancing, export controls, intellectual property and reform of the World Trade Organization (WTO). The European Union set October as the deadline for measurable progress, with Šefčovič planning a follow-up visit to Beijing in the autumn.

The figures involved are large. The EU's goods deficit with China reached about 360 billion euros in 2025, up from the prior year, and now runs at roughly 1 billion euros a day. Among the options under discussion are rules requiring firms to diversify supply chains for critical inputs such as chips and rare earths, sector-specific safeguard investigations, and, in proposals from France, Italy and others, direct tariffs that would bypass lengthy anti-dumping cases.

The bloc is divided. France presses for stronger tariffs, while Germany and Spain, with deeper commercial ties to China, favor caution. The South China Morning Post reported that Beijing has vowed to respond to any new restrictions.

Europe is thus moving in the same direction as Washington, raising barriers to Chinese goods on industrial-policy and security grounds, while keeping a negotiating channel open. The constraint is that European prosperity depends on open trade, and tariffs that protect favored sectors also raise input costs for everyone else.