EU officials face a trade war risk with China as the bloc's deficit reaches EUR59.9 billion, raising unemployment concerns.
Brussels-based Parliament Magazine reported that European officials are struggling to avoid a trade war with China as the bloc's trade deficit hit EUR59.9 billion (US$415 billion) last year and unemployment continues to rise.
European Commission President Ursula von der Leyen met Chinese Premier Li Qiang in Beijing in July, but analysts doubt the October follow-up talks will deliver major concessions. EU Trade Commissioner Maros Sefcovic stated that negotiators would have 'sufficient time to deliver tangible results,' though expectations remain low.
Brussels accuses Beijing of flooding markets with cheap exports through subsidies in steel, aluminium, electric vehicles, and batteries. The EU has responded with tariffs and safeguards, including duties on Chinese nylon imports that threaten jobs in Croatia, Italy, Spain, Romania, and Slovenia.
Analysts warn that any confrontation would likely be limited to strategic sectors but still damaging. Camille Boullenois of Rhodium Group noted that both sides could seriously hurt each other's economies, with China particularly vulnerable to losing access to the EU's EUR18 trillion single market.
The EU is heavily reliant on Chinese raw materials, including rare earths vital for defense and clean energy. Daniel Burke of Datenna highlighted that Chinese firms dominate the production of neodymium magnets, pharmaceuticals, and titanium, leaving Europe exposed to supply chain disruption.
Brussels has sharpened its trade defense tools, including the Anti-Coercion Instrument, but governments remain cautious about retaliation. A new mechanism to tackle industrial overcapacity is under discussion. Analysts agree that Europe cannot afford inaction, warning that doing nothing would be the most damaging outcome.
