European leaders gather in Brussels on Thursday to decide how to handle China’s surging exports of cars and other manufactured goods, which the base reporting says threaten local industry and cause mass layoffs across Europe. Volkswagen alone is cutting 100,000 jobs in Germany. The people losing those jobs aren’t at the table. Their bosses’ governments are.
The Summit as Escape Hatch
For some leaders, the two-day meeting offers a welcome break from trouble at home. French President Emmanuel Macron faces student protests and sharp bond losses over a budget deadlock. German Chancellor Friedrich Merz struggles to get his coalition on track after regional vote defeats. Spanish Prime Minister Pedro Sanchez trails in polls ahead of a snap election he called for November 29, about six weeks away.
The pattern is hard to miss. Mainstream politicians face pressure from far-right and nationalist parties, buoyed by many voters’ sense that the economy isn’t generating enough wealth to fund the public services they expect. Nobody on the summit agenda proposes changing who the economy generates wealth for. The agenda also covers Ukraine, including US President Donald Trump’s diesel deal with Russia, plus the Middle East, defence, migration, the EU’s long-term budget and enlargement of the 27-country bloc. Migration gets one bullet, sandwiched between defence and the budget.
Protectionism by Another Name
The main event is a goods deficit with China that hit €360 billion ($402 billion) last year and had already reached €200 billion in the first six months of 2026. European Commission President Ursula von der Leyen called it “unsustainable” and promised the EU would use every possible means to reduce it.
Note the shift. The EU executive has moved its focus away from improving access for European companies to Chinese markets and towards letting China sell less into the bloc. Deficits exist in machinery, textiles, basic metals, chemicals and cars. Trade Commissioner Maros Sefcovic called last week’s preliminary deal on hybrid car imports a “very good result,” but cautioned it was only a first step. A senior Commission official said dialogue alone was unlikely to finish the job.
The Franco-German paper calls for urgent measures on chemicals and PET, the plastic widely used in packaging. It also urges limits on companies’ reliance on single sources for critical supplies and quick retaliation against countries that harm the bloc. The Commission is likely to propose the first such measure in December.
Berlin’s U-Turn
Germany, a vocal critic of EU plans to impose tariffs on China-built electric vehicles only two years ago, has now signed up to France’s protectionist stance. Sander Tordoir of the Centre for European Reform called the switch “significant” and said the two most important member states “clearly see eye to eye on how to deal with the second China shock.” Principles lasted exactly as long as the polling allowed.
Legacy Hunting
Macron lost his parliamentary majority in 2024, two years ago, so European policy is one of the few levers through which he can still exert political influence and shape his legacy. He has to step aside next year when his term ends. Sanchez pressed for a softer line towards Beijing because Spain welcomes Chinese investment, and he could be out of office after November 29. Polish Prime Minister Donald Tusk and Italian Prime Minister Giorgia Meloni arrive from relative strength, though rising inflation and energy costs hamper Italy. In Poland, weariness towards refugees and fears of war spilling across the Ukrainian border have pushed voters towards far-right parties.
China’s exports rose 36.3% in September from a year earlier, its customs agency said Wednesday. Sefcovic met Chinese Vice Premier He Lifeng in Beijing on October 9. Two governments, two trade chiefs, one question: who gets to sell what to whom. The workers whose jobs are the bargaining chips get no seat, no vote and no briefing.