EU and China open three months of trade talks over the €360bn imbalance

The European Union and China have opened three months of trade and investment consultations in Brussels, with the bloc pressing for tangible progress by October on the €360bn imbalance in their economic relationship.

EU Trade Commissioner Maroš Šefčovič and Chinese Commerce Minister Wang Wentao met on June 29 and launched the EU-China Trade and Investment Consultations, the first formal EU-China trade consultations in seven years. Reporting says the talks are meant to stabilize the relationship and make it more balanced.

The timing reflects growing concern in Brussels about cheap Chinese exports, industrial overcapacity and weaker access for European firms in the Chinese market. The consultations also come after the EU raised tariffs on Chinese electric vehicles in 2024, although that step did not materially curb imports, according to reporting.

The Brussels launch

The opening meeting in Brussels set a three-month window for the two sides to show progress. Šefčovič has said he wants tangible results by October, making that month the first major checkpoint for the process.

The latest reporting cites Eurostat data putting the EU’s annual trade deficit with China at about €360bn, or roughly €1bn a day. That figure has become the backdrop to the consultations and a key reason the Commission is pushing for a faster rebalancing of the relationship.

The talks were presented by both sides as a formal channel to keep the economic relationship from drifting further into conflict. The European Commission is trying to use the new process to turn broad concern into measurable change.

What is on the agenda

The consultations cover four main areas: trade and investment rebalancing, export controls, intellectual property rights and reform of the World Trade Organization.

Export controls are especially sensitive because of supply-chain concerns around strategic inputs such as rare earths. The issue also touches high-tech exports and the question of how far each side is willing to limit flows in strategic sectors.

Intellectual property remains another point of friction for European firms, which have long complained about market barriers and the difficulty of protecting technology and know-how in China. WTO reform rounds out the agenda, giving the talks a broader multilateral dimension beyond the immediate bilateral deficit.

Monitoring and pressure

A new monitoring mechanism was also agreed to watch for unusual trade flows. If imports or exports surge again, the mechanism is meant to trigger political talks before tensions escalate further.

That oversight step matters because the EU is trying to avoid being caught off guard by a new wave of import pressure. Brussels has already signaled that if the consultations fail to deliver results, it may need to consider stronger trade defenses later on.

The stakes are not only diplomatic. EU industry and jobs could face more pressure if import surges continue, and the talks may shape whether Brussels stays with negotiation or moves toward quotas or other restrictions.

Europe’s broader concern is not limited to one sector. Policymakers have increasingly warned about what some describe as “China Shock 2.0,” meaning the strain that cheap Chinese exports can place on EU manufacturing.

For now, both sides are keeping the channel open. The immediate question is whether the Brussels consultations can produce concrete progress before the October deadline, or whether the relationship moves toward another round of trade escalation.