Brussels is signaling a distinct shift in its approach to Beijing, with European Commission President Ursula von der Leyen publicly stating that dialogue alone will no longer suffice to rebalance the continent’s increasingly lopsided trade relationship with China. Her recent remarks to Medef, the prominent French business organization, underscore a growing impatience within the EU, particularly as the trade deficit with China now stands at a staggering one billion euros every single day. This financial imbalance, she emphasized, cannot become a permanent fixture of their economic partnership.
The Commission has given itself until October to forge a new agreement with Beijing, a deadline that looms large given the persistent tensions that have characterized discussions since they began last June. China, for its part, has already taken steps to restrict its firms from participating in EU antitrust investigations, a move that only highlights the deepening friction. Meanwhile, the European Union has dramatically escalated its own scrutiny, opening 30 trade defence investigations over the last year alone. This figure represents nearly triple the historical average, a clear indication of a more aggressive stance against what the EU perceives as unfair trade practices, particularly the dumping of cheap Chinese imports onto the European market, which have surged by 45% in just five years.
Von der Leyen’s comments are not just rhetoric; they reflect a mandate given by EU leaders in June to actively rebalance the relationship, not solely through negotiation but also through the deployment and review of various defence mechanisms. Among these tools is the EU’s anti-coercion instrument, sometimes colloquially dubbed the “trade bazooka.” This powerful mechanism allows the bloc to impose severe measures, such as restricting access to public procurement or even removing intellectual property rights, should a foreign country exert undue pressure to alter EU policies. Its activation, however, hinges on securing a majority of member states’ support, a consensus that remains uncertain given that many EU nations continue to pursue bilateral trade deals and investments with China.
The sentiment in Brussels is that while China remains a crucial economic partner, the principle of “de-risking without breaking ties” must be upheld. Yet, this partnership cannot come at the cost of accepting persistent imbalances. Every single EU member state now records a trade deficit with China, a widespread economic reality that strengthens the collective resolve to address the issue. The threat of a potential trade war has loomed large in recent months, with Beijing having previously warned of retaliation against proposed EU regulations designed to limit market access for Chinese companies.
This escalating pressure from the European Commission signals a pivotal moment in EU-China relations. The coming months will determine whether the current diplomatic push, backed by the implicit threat of robust trade defence measures, can indeed compel a rebalancing of the trade scales, or if the EU will ultimately need to deploy its full arsenal of instruments. The stakes are high, not just for the EU’s economy, but for the future trajectory of global trade dynamics.
