As European Union commerce commissioner Maros Sefcovic hosted Chinese language Commerce Minister Wang Wentao in Brussels for talks on Monday, the Slovak diplomat was all smiles.
However behind the diplomatic niceties, Sefcovic’s message to China rang out loud and clear.
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Addressing the media after a marathon day of negotiations with Wang, Sefcovic could not have actually stated “sufficient is sufficient,” however he hardly wanted to.
“China’s exports to the EU preserve rising, whereas our market share in China retains shrinking,” Sefcovic stated.
“This pattern isn’t sustainable. The established order isn’t an possibility.”
For a very long time, Europe was seen because the Transatlantic counterargument to United States President Donald Trump’s protectionism, defending free commerce and commerce towards a rising populist tide.
That now looks like a distant reminiscence.
Chinese language corporations’ quickly rising footprint in Europe, facilitated by China’s large subsidisation of trade and economies of scale, has rattled European corporations and shaken the bloc’s leaders into motion.
In a speech to the G7 final 12 months, European Fee President Ursula von der Leyen dubbed Chinese language trade’s rising dominance abroad a “new China shock”.
Whereas there’s quite a lot of views amongst EU member states about how far the bloc ought to go to push again towards the wave of Chinese language items flooding into the market, there’s broad alignment on the necessity to take motion to safeguard home trade.
“The temper has shifted as a result of there’s actual hazard for European firms and everyone seems to be beginning to realise it,” Philippe Le Corre, a professor of worldwide relations and Asian research at ESSEC Enterprise College in Cergy, France, instructed Al Jazeera.
“That is the brand new regular,” Le Corre added.
“There is no such thing as a motive the Europeans must be sitting on the aspect, ready for the Individuals and the Chinese language to discover a compromise on large points. The EU wants its personal insurance policies together with vis-a-vis China.”
China’s commerce surplus with the EU hit 360.6 billion euros ($411bn) in 2025 – the equal of 1 billion euros a day and up 15 % from the earlier 12 months.
Chinese language corporations now dominate Europe’s provide of products in a bunch of essential sectors, together with photo voltaic panels, uncommon earths, chemical compounds, and industrial robots.
In the meantime, Chinese language firms are more and more difficult a few of Europe’s most prized legacy firms on their residence turf, significantly automotive makers.
EU tariffs of as much as 35.3 % on Chinese language electrical automobiles have finished little to gradual the advance of widespread manufacturers reminiscent of BYD, Geely and Chery.
In Could, Chinese language fashions surpassed 10 % of whole auto gross sales within the bloc for the primary time, based on Dataforce.
The fallout for a lot of of Europe’s high automotive manufacturers, among the most enduring symbols of European industrial innovation and design, has been devastating.
Final week, German media reported that Volkswagen was making ready to chop as many as 100,000 jobs – about 15 % of its workforce – in what can be the largest restructuring within the historical past of the worldwide automative trade.
BMW has introduced plans to chop about 5 % of its workforce by the tip of 2026, whereas fellow luxurious model Mercedes-Benz has paused worker bonuses and provided hundreds of staff voluntary redundancy.
China has rejected accusations that it encourages industrial overcapacity to flood the worldwide market and threatened to retaliate if the EU takes motion to right the perceived commerce imbalance.
“China is in a position to deal with a scenario the place China-EU financial and commerce relations deteriorate additional and even slide to the freezing level,” Yuyuantantian, a social media account linked to Chinese language state media, warned earlier than Sefcovic and Wang’s talks.
“China doesn’t need to go that far however it’s not afraid to go that manner.”
Amongst different measures into consideration, EU has proposed overhauling the Cyber Safety Act to bar Chinese language corporations from essential infrastructure; drafted laws, the Industrial Accelerator Act, that will prioritise EU-made items in public procurement; and floated plans to drive European firms in delicate industries to supply parts from at the least three completely different suppliers.
A number of different measures concentrating on Chinese language imports are as a result of take impact on July 1, together with a discount within the duty-free quota for imported metal and a 3-euro ($3.42) customs cost on small parcels.
Whereas EU member states are coalescing round a harder line on China, the bloc can be broadly seen as wanting to keep away from a full-blown commerce battle with the world’s second-largest financial system.
Following Monday’s talks with Wang, Sefcovic touted their “constructive” dialogue and expressed optimism that Brussels and Beijing had been “beginning to perceive one another higher”.
“That’s the reason at the moment’s talks – and those to observe – matter. They assist us keep away from pointless stress,” he stated.
Sefcovic and Wang stated in a joint media launch that they recognized 4 “workstreams” for his or her subsequent spherical of negotiations in October, together with export controls and commerce and funding balancing.
Sefcovic and Wang stated in addition they agreed to determine a joint commerce monitoring mechanism “with a view to enhancing transparency, enhancing mutual belief and managing commerce frictions”.
For Europe, the hope will likely be that China accepts significant concessions to maintain its entry to the European market, averting a harmful commerce battle.
Whereas EU leaders are involved about Chinese language retaliation, they’re unlikely to accept face-saving or non-substantive measures because of the stakes for European trade, stated Alicia Garcia-Herrero, chief economist for the Asia Pacific at Natixis in Hong Kong.
“The variety of job losses and so forth is so large that it will be stunning to me,” Garcia-Herrero instructed Al Jazeera.
