The European Union runs a trade deficit with China of more than $1 billion a day, and Brussels is preparing for a confrontation it can no longer avoid. Maroš Šefčovič, the European Commission's top trade envoy, arrived in Beijing Thursday for a two-day meeting with Chinese Commerce Minister Wang Wentao. He has one task: narrow a 360 billion euro ($410 billion) shortfall. Earlier this year, he gave Beijing an October deadline to deliver meaningful results. That deadline has arrived.
Parliament Draws a Line
The mood in Strasbourg has hardened. After a debate Tuesday, the European Parliament voted 454 to 86 on Wednesday for a resolution demanding "economic reciprocity and a proportionate EU response if China does not open its markets." The margin leaves little doubt. Hilde Vautmans, the Belgian lawmaker who led the resolution, put it bluntly before the vote: "Europe has economic power, it's time we used it."
The EU has already acted on Chinese steel imports and small e-commerce parcels. Now the question is how far it's prepared to go.
The Toolbox and the Jobs at Stake
Options range from tariffs to the so-called "trade bazooka," the Anti-Coercion Instrument. No one has used it. The tool could block or restrict trade and investment from countries found to be pressuring EU members or corporations. France and Germany proposed a broad rethink of EU policy toward China in a letter seen by The Associated Press, including a move to make it easier for the Commission to deploy the instrument. France's High Commission for Strategy and Planning went further in February, calling for swift measures, including 30% tariffs on many Chinese exports and a devaluation of the euro against China's currency.
The industrial stakes are concrete. In June, the European Policy Centre in Brussels said producers of batteries, solar panels, steel, electric vehicles, chemicals and machinery were losing jobs and capacity. The group called for a trade investigative body modelled on Section 301 of the U.S. Trade Act. German auto sales are falling sharply in China, while Chinese automakers, backed by heavy state subsidies, are positioned to gain European market share by undercutting prices. Volkswagen and other major manufacturers have already made mass layoffs. Commission President Ursula von der Leyen has called the trend another "China shock" for Europe, comparing it with the early 2000s in the United States, when hundreds of thousands of factory jobs in the American heartland disappeared.
A Divided Bloc
Not every capital sees China the same way. Spain, the eurozone's fourth-largest economy, has taken a less adversarial approach in recent years. Prime Minister Pedro Sanchez has visited Beijing four times in three years. Chinese carmakers are also expanding production capacity in Europe. Max Zenglein, Asia Pacific senior economist at The Conference Board, said Chinese investment could become one of Beijing's bargaining chips as member states compete for capital, jobs and new manufacturing projects.
Tim Rühlig, a China analyst at the European Union Institute for Security Studies, said the EU's weak economy required domestic reform alongside a more aggressive foreign trade policy. European businesses and political leaders also bear some responsibility, he said. "It's clear that just protecting yourself from China is not the future," Rühlig said. "But to have a chance of making yourself ready for future technologies and to remain competitive in the coming 15-20 years, you have to protect yourself." The EU can't completely disengage, as it did with Russia after its invasion of Ukraine, he said. "Where do we make ourselves independent or at least more diverse? And where do we still work with the Chinese?"
Beijing Pushes Back
China isn't blinking. Its customs agency reports exports to the EU rose 15.3% in the first eight months of the year, while imports from the EU rose 6.2%. China recorded a $1.2 trillion global trade surplus in 2025. After U.S. tariffs took effect last year, its exports expanded to Europe, Southeast Asia, Latin America and Africa. Over the weekend, before the Šefčovič-Wang meeting, China opened an anti-dumping probe into EU exports of p-nitrotoluene, used in dyes and pharmaceuticals. Beijing had warned the previous month that it would retaliate against tougher EU measures.
A spokesperson for China's Ministry of Commerce said: "Protectionism cannot enhance competitiveness, and decoupling or cutting off supply chains will only harm others without benefiting oneself." The state-run Global Times took a blunter line in an editorial: "The EU does not have the capacity to wage a trade war against China. If it is truly determined to do so, then let it try." Zenglein noted that "China has been battle-tested by successive rounds of external pressure and, so far, has largely stared down attempts to force a change in course."
Why This Matters:
A deficit of 360 billion euros is no abstraction for factory towns that depend on steel, cars and batteries. Parliament's 454-to-86 vote shows the political cost of inaction now exceeds the cost of confrontation. Yet the bloc's response will test its cohesion: France and Germany want sharper tools, while Spain favours engagement, and trade policy sits uneasily between Brussels' competence and national interests. From a competitiveness standpoint, the harder question is whether Europe pairs defensive measures with the domestic reform Rühlig describes. Protection without reform buys time; it won't restore industrial strength. Whatever Šefčovič brings home from Beijing, member states and voters will judge it by results, not rhetoric.