The European Union and China together account for nearly 30% of global trade, but Europe continues to run a significant trade deficit with the world’s second-largest economy. Recently, relations between Brussels and Beijing have been marked by tension over issues such as European tariffs on electric vehicles, Chinese export restrictions on rare earth metals, and unequal market access. The upcoming EU–China summit will take place more than 18 months after the previous meeting.
“The key issue in EU–China trade is tariffs and how we shape our trade cooperation. While it’s easier to agree on smaller trade matters, it becomes much more complicated when it comes to knowledge transfer in so-called high technologies,” said Patryk Jaki, a Member of the European Parliament (MEP) from Poland’s Law and Justice (PiS) party, in an interview with Newseria. “The United States is right to point out that China, as a non-democratic state, may use data collection for purposes that are not necessarily aligned with the security interests of our region. If, in the future, a major conflict arises and China supports Russia, data obtained through Europe’s wide adoption of new technologies could be used against us. This is a strategic-level issue that the EU must take into account, including the use of artificial intelligence and advanced IT infrastructure, such as satellite systems.”
25th EU–China Summit and Trade Imbalances
On July 24, Beijing will host the 25th EU–China Summit, where European Council President António Costa and European Commission President Ursula von der Leyen will meet with Chinese President Xi Jinping and Premier Li Qiang. The summit coincides with the 50th anniversary of diplomatic relations between the EU and China.
Despite the deep economic ties, the EU runs a substantial trade deficit with China. In 2024, the total value of bilateral trade in goods and services exceeded €845 billion, with imports from China valued at €519 billion, compared to just €213.2 billion in EU exports to China. While the EU has a better balance in trade in services, the volume is far smaller: Chinese services exports to the EU were worth €45.5 billion, while EU service exports to China totaled €67.3 billion.
The EU imports mostly telecommunications equipment, audio devices, office electronics, personal computers, and electrical machinery from China. In return, it exports machines, automobiles, motor vehicles, and vehicle parts. However, the automotive sector has become a flashpoint in recent years.
Tariffs on Chinese Electric Vehicles
In October 2024, the European Commission imposed additional tariffs on heavily subsidized Chinese electric vehicles (EVs) after a nine-month anti-subsidy investigation revealed unfair state support for Chinese manufacturers. The tariffs were set at 17.0% for BYD, 18.8% for Geely, and 35.3% for SAIC, in addition to the standard 10% import duty on cars.
In January 2025, BYD, Geely, SAIC, and Tesla (which faced a lower tariff of 7.8%) challenged these tariffs before the Court of Justice of the European Union. In April, the EU and China began negotiations to replace tariffs with a minimum price mechanism for Chinese EVs, in exchange for increased investment by leading Chinese manufacturers in Europe and technology transfer agreements.
Rare Earth Metal Restrictions
Meanwhile, on April 4, China introduced export restrictions on rare earth metals as part of a broader response to tariffs imposed by U.S. President Donald Trump, cutting supply to Western markets. Rare earth elements, a group of 17 chemical elements, are critical for producing modern technologies, including electronics, magnets, and catalysts. China holds a quasi-monopoly on the global supply of these materials, and the export limits have disrupted automobile production, defense industries, and the energy sector in Europe.
“If China imposes sanctions on critical products and infrastructure, the European Union should consider responding in kind with measures of equal strength to secure a favorable agreement,” argues MEP Jaki.
EU–US Relations Remain a Priority
When asked about the importance of strengthening trade ties with China amid the complex dynamics between the EU and the United States, Jaki emphasized that Europe should prioritize its transatlantic alliance.
“The U.S. is not only our main trading partner but also a key element of our security architecture, an important NATO ally, and a partner that shares our democratic values. When it comes to political freedom, participation, and societal influence on decision-making, the U.S. is a natural choice. If offers from China and the U.S. were equal, it would always be better to choose the United States. However, we cannot ignore China, which remains a huge market with significant advantages. We must think strategically about knowledge transfer and building Europe’s competitive strength rather than shutting the door on China altogether,” he concludes.
