Low Expectations for EU-China Summit Amidst Mounting Trade Tensions
Analysts hold dim expectations for a EU-China summit scheduled for Thursday in Beijing, which will critically test Europe’s unity and resolve. The European bloc is currently under significant trade pressure from both China and the United States.
Key Agendas and Limited Hopes
European Commission President Ursula von der Leyen and European Council President Antonio Costa plan to address Chinese leaders on sensitive issues such as rare earths and the war in Ukraine. However, given both sides’ struggles with economic growth and Europe’s efforts to bolster support for Ukraine, little progress is anticipated. The summit was even shortened to one day due to a “scheduling conflict” cited by Chinese officials. While a modest joint statement on climate might emerge, no other substantial outcomes are expected.
Von der Leyen has recently adopted a tougher stance on China, accusing it on July 8 of “enabling Russia’s war economy” and “flooding global markets with overcapacity.” Despite acknowledging disagreements, an EU official emphasized the importance of maintaining “very direct and open and constructive conversation.” The Chinese foreign ministry, in response, accused “some people in Europe” of exaggerating economic issues and making “groundless accusations” regarding Ukraine, causing “unnecessary interference.”
Escalating Trade Disputes
The 27-member European Union is also intensely negotiating with the United States, as President Donald Trump has threatened a 30% tariff on most EU exports starting August 1, dimming prospects for a broader trade deal.
At the Beijing summit, China hopes to push for a resolution regarding EU tariffs on its electric vehicles, claiming price commitment negotiations are in their “final stages,” though European officials report little recent progress. Last week, China threatened retaliation against EU sanctions imposed on two Chinese banks and five firms due to their involvement in the Ukraine war, calling the sanctions damaging to trade and financial ties.
Other trade disputes are brewing, including China’s recent retaliatory curbs on medical device procurement following EU restrictions and new duties on French cognac. Concerns are also rising that Chinese trade overcapacity, stemming from U.S. tariffs, is being diverted to the EU, as evidenced by growth in China’s exports to the EU in May while its U.S. exports significantly declined. Furthermore, EU firms are reportedly collateral damage from China’s rare earth export controls, which primarily targeted Washington but have disrupted European supply chains.
In exchange for rare earth concessions, China might seek the revival of a stalled investment agreement, especially after Beijing lifted sanctions on European Parliament members in May. It could also push back against U.S. export curbs on Dutch firm ASML’s chipmaking equipment, issues China has raised in the lead-up to the summit.
“Gloves Off” Mentality and Ukrainian Impasse
Mathieu Duchatel of the Institut Montaigne observes an “extremely pessimistic mood in Europe regarding the summit,” noting Washington’s past rejection of EU proposals for China policy coordination. He senses a “gloves completely off” approach from China, which he believes is exploiting a perceived weakening of the transatlantic relationship.
Diplomats and analysts also suggest China is increasingly frustrated by Europe’s persistent focus on the Ukraine war, viewing it as an obstacle. Another EU official admitted little room for constructive dialogue on this issue, as Chinese counterparts deny evidence of Chinese firms supplying dual-use goods to Russia.
A diplomat familiar with Chinese official thinking believes China expects Europe to eventually yield to U.S. tariff pressure. Beijing’s recent successes in getting Trump to lower tariffs and resuming Nvidia H20 AI chip exports have put it in a relatively strong negotiating position. Noah Barkin of Rhodium Group’s China practice concludes that this summit is likely to be “the latest in a long list of EU-China summits that have delivered next to nothing,” indicating that the “economic and security problems in the relationship have become so deep-seated as to be irreconcilable.”
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