EU Leaders Confront Beijing on Trade Deficit, Seek US Cooperation

European Union leaders are poised for critical discussions on EU-China relations at their upcoming June summit, driven by mounting concerns within the European Parliament regarding Beijing's economic practices and a widening trade imbalance. Leading voices, including Manfred Weber, chairman of the European People's Party (EPP), and Valérie Hayer, president of the Renew Europe group, are advocating for a tougher, more unified approach, signalling an end to what they describe as an era of 'naivety' in the bloc's engagement with China.

At the heart of the debate is the EU's significant and rapidly growing trade deficit with China. Eurostat data reveals an alarming trend: the EU's trade deficit with China reached a record €1 billion per day, amounting to €31.9 billion in April alone. In 2025, the EU's imports from China were €559.4 billion, while exports stood at €199.6 billion, resulting in a deficit of €359.8 billion. This stark imbalance, described by Weber as 'unacceptable,' is jeopardising Europe's industrial base and high-quality jobs, with warnings that Chinese overproduction and low-priced exports are undercutting fragile European economies, particularly in sectors like electric vehicles, chemicals, and machinery.

Manfred Weber has been particularly vocal, urging the EU to 'open a new chapter' in its relationship with China and to 'defend European interests more clearly, more firmly and more consistently.' His call for direct discussions with the United States on how to respond to China underscores a growing sentiment within Europe that a united transatlantic front is essential. This aligns with broader recommendations for a transatlantic China policy that emphasizes deconflicting bilateral ties, disentangling economies from uncomfortable dependencies on China, and denying critical technologies to Beijing that could advance its military capabilities. The aim is to create a stronger collective leverage in trade, technology, and multilateral engagement to hold China accountable to international standards.

Valérie Hayer echoed this shifting paradigm, stating that Europe must no longer be 'happy servants' in its relationship with China. Her remarks reflect a broader European awakening to the systemic challenges posed by China, moving beyond viewing it merely as a commercial competitor to recognizing it as a structural threat to Europe's industrial base, technological autonomy, and control over strategic infrastructure. This change in perception has been fueled by concerns over market access asymmetry, intellectual property theft, state subsidies, and China's distortive industrial policies.

The European Commission has already signaled intentions to strengthen 'economic security' by reducing dependencies on China for critical technologies and raw materials, a strategy termed 'de-risking.' This strategy, initially proposed by European Commission President Ursula von der Leyen in 2023, aims to reduce risks in sensitive areas without completely severing economic ties. However, the sheer scale of the deficit suggests that corrective measures will require significant time and concerted effort. Options being considered include stronger trade defense tools, anti-subsidy investigations, accelerated diversification of supply chains, and potentially targeted tariffs.

There is also a growing understanding that while cooperation with China is still needed for global challenges like climate change, it cannot come at any price. The EU needs to ensure that its climate policies, such as the ban on new combustion engine vehicles, do not inadvertently benefit Chinese competitors, as highlighted by Weber regarding the rise of Chinese electric carmakers in Europe. The upcoming June summit will therefore be a crucial platform for EU leaders to provide guidance to the Commission on how to deal with these complex challenges, seeking a balance between competition and cooperation while robustly defending Europe's economic interests and democratic values. The discussions are expected to shape the EU's long-term strategy, prioritizing resilience and economic security in an increasingly fragmented global trade environment.