Europe tries to take on China without launching a new trade war

Europe's bid to address China’s trade practices without triggering a new trade war marks a strategic shift in global commerce. The 27 EU capitals unanimously recognize the economic threat posed by Beijing's policies if left unchecked. At a June 18 Brussels meeting, EU leaders prepared to discuss how to handle forthcoming talks with Beijing and potential responses, including new trade tools. The bloc remains focused on a widening trade deficit—now more than €1 billion a day—driven in part by state-subsidised products and Beijing's grip on critical minerals and chips. Officials emphasise diversification of supply chains and the need for measures that are credible and sustainable. EU trade chief Maros Sefcovic warned that Europe’s trade relationship with China is not sustainable and that diversification requires a dedicated instrument. French President Macron warned the EU may take strong measures, including tariffs, if Beijing fails to address the imbalance. Analysts note the shift from 2019, when China was treated as a partner, and highlight German carmakers’ exposure, with 2025 shipments to China down about a third and more than 50% below the 2022 peak.