EU and China Officials Meet to Discuss Trade Tensions

Kathmandu. Chinese representative Wang Wentao and EU high trade official Maros Sefcovic will meet on Monday with the initiative to resolve trade tensions between Europe and China through talks. Sefcovic will discuss minimizing problems with his Chinese counterpart Wang throughout the day.

The European Union (EU), a group of 27 nations in Europe, has focused its attention on Asian power China, expressing concern over the growing trade imbalance. This issue has become an existential battle for the EU.

Brussels has expressed fear that the flood of cheap goods produced in China poses a threat to European producers, with the potential for entire industries to be lost. Wang's visit comes less than two weeks after EU leaders instructed the European Commission to negotiate with Beijing to resolve this problem and prepare stronger security measures to protect key sectors simultaneously.

After a day of talks on the issue of the current trade imbalance being unbearable for the EU, Sefcovic will host Chinese leader Wang at a special dinner in the evening. In 2025, the EU's goods trade deficit reached approximately 360 billion euros (410 billion US dollars), meaning the bloc imported significantly more from China than it exported.

Wang will listen, understand, and explain how serious the EU's threat is to use trade defense weapons against Beijing. The EU hopes to avoid a trade war with China, its second-largest trading partner. According to the European Commission, China has already given clear indications that it will retaliate against any steps it deems unfair.

Following Trump's Strategy

Europe is emphasizing the need for a level playing field, stating that Chinese companies gain an unfair advantage due to large government subsidies.

The numbers support Brussels' argument. From 2005 to 2024, government support for Chinese companies was three to eight times higher compared to businesses in the Organisation for Economic Co-operation and Development (OECD). The OECD calls this a 'conservative estimate'.

The EU has proposed various trade defense measures to address this problem. These include imposing high tariffs if investigations prove that companies are unfairly selling goods at low prices or if government subsidies provide an unfair advantage to producers.

Safeguard measures such as quotas can also be imposed in case of a sudden surge in imports. New measures may also emerge. The European Commission, which leads EU trade policy, is working on measures to compel businesses to diversify suppliers in critical sectors like chips and rare earth minerals.

In May, French President Emmanuel Macron proposed a European measure similar to 'Section 301' used by US President Donald Trump. The EU has already taken several steps to counter the increasing imports from China. Double tariffs have been imposed on foreign steel, higher duties on small packets arriving from abroad, and heavy customs duties on Chinese electric vehicles.

While acknowledging the need to be tough, Brussels has shown no desire for a damaging trade war with Beijing. Beijing has warned that it is prepared to respond to any measures it deems targeted at China.

This warning is not an empty threat. China has previously imposed tariffs on European cognac and conducted 'anti-dumping' investigations into pork and dairy products. This warning is affecting EU capitals.

Germany has been more cautious on this issue so far because its economy is heavily dependent on China, but Spain has become the biggest supporter of a pragmatic approach, seeking Beijing's investment.

Last week, while reiterating the warning of Chinese retaliation, China's Ambassador to the EU, Fu Cong, said at an EU event that the EU and China are 'partners, not rivals, and certainly not enemies'.

This relationship is also important for China. The EU is China's second-largest trading partner. After the dinner with Sefcovic, Wang is scheduled to depart for London.