EU sets up three months of talks with China over €360bn trade deficit
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- EU trade commissioner Maroš Šefčovič and Chinese commerce minister Wang Wentao met in Brussels on Monday and issued their first joint statement in seven years, opening formal trade and investment consultations (TIC) over the bloc's €360bn annual deficit with China.
- Šefčovič set an October deadline for the next round in Beijing, citing Eurostat's June 15 finding that Chinese exports to the EU outweigh EU imports by €1bn per day — a figure he called 'unsustainable'.
- The four agreed consultation areas are: rebalancing trade and investment, export controls (including rare earths), intellectual property rights, and WTO reforms.
- Both sides established a joint monitoring mechanism going beyond Eurostat and China's GACC customs database, with sudden export surges triggering 'amber or red' political discussions.
- The European Commission mapped imports and exports in fine detail over the past year, and sources say quotas on hybrids and chemicals could be proposed for autumn after the EU's 2024 EV tariffs failed to curb imports.
- The European Chambers of Commerce in China warned that current export levels threaten to 'cannibalise' EU factories heavily reliant on Chinese components.
Why it matters: With €1bn-per-day in Chinese goods flooding the EU and last year's EV tariffs failing to slow the flow, Brussels is testing dialogue first but has hybrid and chemical quotas queued for autumn if the October Beijing meeting doesn't deliver rebalancing — a concrete escalation path that European industries dependent on Chinese components now face.
