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China and the European Union (EU) have engaged in discussions to enhance their economic and trade cooperation in response to U.S. tariffs. The Chinese Commerce Ministry announced on Thursday that these discussions took place during a video call between China’s Commerce Minister Wang Wentao and European Trade and Economic Security Commissioner Maros Šefčovič on Tuesday.
Talks on Trade Relief and EV Price Commitments
During the discussion, Wang and Šefčovič explored the possibility of restarting negotiations on trade relief measures. They also agreed to initiate talks on price commitments for electric vehicles (EVs) immediately. This dialogue occurred just before U.S. President Donald Trump’s additional tariffs on China took effect.
On Wednesday, Trump unexpectedly announced a temporary reduction in the high tariffs he had recently imposed on multiple countries. However, he simultaneously intensified pressure on China, warning that tariffs on Chinese goods could surge to 125%.
China Advocates for Multilateral Trade Stability
Minister Wang reiterated China’s commitment to deepening trade, investment, and industrial cooperation with the EU. He called on both sides to uphold a rules-based multilateral trading system and support trade liberalization and facilitation. “This will inject more stability and certainty into the world economy and global trade,” the ministry’s statement emphasized.
China and the EU also deliberated on fostering a more favorable business environment for enterprises and managing trade transfer issues. They pledged to maintain open communication within the World Trade Organization (WTO) framework and collaborate on WTO reform.
In late October 2024, the EU imposed additional tariffs of up to 35.3% on Chinese-manufactured EVs, supplementing the standard 10% car import tariff. China’s Commerce Ministry stated last week that both sides had agreed to resume negotiations on setting minimum price commitments for Chinese EVs, although a timeline for these talks remains unspecified.
EU’s Efforts to Track Chinese Imports Amid U.S. Tariffs
The European Union has reached out to Beijing for assistance in monitoring a surge of Chinese imports expected to flow into the EU following Trump’s tariff escalation.
China has vowed to “fight to the end” against Washington in what is becoming an increasingly intense trade conflict. Some Chinese goods could face tariffs as high as 104% when entering the U.S. market.
The EU fears that products restricted from the U.S. market will be redirected toward European markets, exacerbating global trade tensions. European Commission President Ursula von der Leyen addressed this concern with Chinese Premier Li Qiang, proposing the establishment of a tracking mechanism to monitor trade diversions and manage potential consequences.
Upcoming EU-China Summit in July
One of the critical moments for cooperation between the EU and China in this evolving trade war will be an upcoming summit in July, where the EU hopes to host Chinese dignitaries. The European Commission subtly included this announcement at the end of its statement following the Brussels-Beijing phone call. Earlier speculation had suggested a summit in May.
While the European Commission’s chief spokesperson, Paula Pinho, acknowledged to Poltico that “July would be the idea.”
“President von der Leyen emphasized China’s critical role in addressing possible trade diversion caused by tariffs, especially in sectors already affected by global overcapacity,” the Commission’s statement read.
EU Task Force to Monitor Trade Diversions
This diplomatic outreach to China came a day after the EU’s trade chief, Maros Šefčovič, announced a European task force in Luxembourg to monitor trade diversions. Following discussions with the EU’s 27 trade ministers, the bloc recognized that if diplomatic talks with China fail, the EU may have to introduce “safeguard measures,” which include special duties to counter sudden influxes of diverted trade.
The Complicated EU-China Trade Relationship
Despite their ongoing trade disputes, the EU remains China’s largest trading partner, with mechanical appliances and electrical equipment being the most traded goods. Over the past decade, trade between the EU and China has steadily increased.
China ranks as the EU’s second-largest trade partner, with Germany, the Netherlands, and Italy being the top importers and exporters of goods to and from China.
- More than half of the goods the EU imports from China are mechanical appliances and electrical equipment.
- Vehicles and aircraft account for less than 6% of EU imports from China.
- Organic chemicals represent 4.7%, while clothing accessories make up 4.5%.
Conversely, more than a third of EU exports to China consist of mechanical appliances and electrical equipment, followed by:
- Vehicles and aircraft (16.7%)
- Pharmaceutical products (9.3%)
- Optical instruments (7.2%)
Ongoing Trade Disputes Between China and the EU
Chinese electric vehicle giant BYD reported record-breaking sales of hybrids and EVs in 2024, driven by strong domestic demand and government-backed trade-in programs.
BYD’s battery electric vehicle sales surged by 12.08% from 2023, reaching 1.76 million units.
In response to perceived unfair competition due to Chinese state subsidies, the EU imposed duties on Chinese EVs in late 2024. China has denounced these measures as protectionist and retaliated by launching an anti-dumping investigation into EU dairy products, which may lead to tariffs on imports like cheese and milk.
Also Read: Trump Targets China with Higher Tariffs, A Massive 125% Hike On Lack Of Respect
