EU weighs tougher trade tools as it seeks to narrow China deficit

EU Trade Commissioner Maroš Šefčovič said negotiations with China require both trade measures and political engagement as Brussels seeks to reduce a record trade deficit of €1 billion a day. The European Commission is also considering stronger powers to counter economic distortions.

Speaking after talks among the EU's 27 trade ministers in Ireland, Šefčovič warned that entire sectors faced threats and that national leaders were concerned about potentially heavy job losses.

Brussels and Beijing agreed on October 9 to limit Chinese hybrid car imports. Under the arrangement, country-specific quotas will permit 350,000 vehicles a year to enter the EU over four years, subject to a fixed annual adjustment of 6%.

The Commission wants to negotiate similar arrangements for additional sectors. Technical talks with Beijing are continuing through the end of the year, followed by political negotiations scheduled for January and March 2027.

EU leaders have authorized work on a proposed “kill switch” that would let the bloc cut China's market access in response to economic distortions. A separate EU measure aimed at Chinese chemicals and industrial machinery could follow in December, potentially triggering countermeasures from Beijing.

EU officials cautioned that further agreements would also depend on China's response to stronger European trade defenses. Chinese customs figures showed exports to the EU rose 25% over the past year.