The EU and China are at a significant turning point in their relationship, marked by rising tensions over trade deficits and geopolitical influences.
EU-China Relations at a Crossroads as Trade Tensions Escalate
EU-China Relations at a Crossroads as Trade Tensions Escalate
European Commission President Ursula von der Leyen warns of deepening trade imbalances during summit with Xi Jinping.
During a high-stakes summit in Beijing, European Commission President Ursula von der Leyen expressed that EU-China relations have reached an “inflection point.” Meeting with Chinese President Xi Jinping, she pointed to increasing imbalances in their cooperation, particularly the EU's significant trade deficit with China, which soared to €305.8 billion in 2022. This figure has doubled over the last nine years, prompting growing concerns within the EU.
Von der Leyen emphasized that aligning on mutual concerns is essential, calling for “real solutions” to existing issues, including China’s close ties with Russia, which she labeled as “the determining factor” in future EU relations. Xi, in response, asserted that “the current challenges facing Europe do not come from China” and urged EU leaders to work toward "properly managing differences.”
The summit, which was unexpectedly reduced from two days to just one at China’s request, generated low expectations among EU officials. Despite aiming to advance a collaborative approach, the backdrop of recent tensions, particularly regarding the Russia-Ukraine conflict, complicated the atmosphere.
Notable friction emerged following the EU's sanctions on two Chinese banks linked to support for Russia and Xi's earlier rejection of an invitation to Brussels. Engin Eroglu, chair of the European Parliament's China delegation, articulated that the growing mistrust has led to a “tense - if not frosty” environment between the two giants.
During discussions, Xi called for "mutual trust" and highlighted that competitive growth should not involve erecting barriers or severing supply chains. However, von der Leyen argued for a rebalancing that would involve better access for European firms in the Chinese market and adjustments to export controls.
Further complicating matters, China imposed retaliatory tariffs last year on European goods after the EU enacted tariffs on Chinese electric vehicles. In response to EU restrictions on Chinese medical devices, Beijing has curtailed government purchases of such items from Europe. Additionally, China has enhanced export controls over crucial minerals, a move that von der Leyen has criticized as using its market dominance to undermine international competitors.
As both sides navigate these turbulent waters, there is a pressing need for dialogue and constructive engagement to steer EU-China relations toward a more cooperative and equitable future.
