Maroš Šefčovič faces divided EU in crucial trade talks with China

The European Commission has developed proposals for an 'overcapacity' instrument to impose tariffs on Chinese goods, alongside a 'diversification' tool to reduce industrial reliance on Beijing. However, these plans have stalled as national leaders struggle to reconcile their domestic trade interests with a unified EU policy. Recent summits revealed a spectrum of stances, ranging from the cautious dialogue favored by Austria and the Netherlands to the more aggressive stance adopted by France and, increasingly, Germany. German Chancellor Friedrich Merz recently signaled a shift, condemning the systematic subsidization and market flooding that he says distort fair competition.

The urgency is underscored by data from the Centre for European Reform, which estimates China consumes only 13 percent of the global manufacturing output it produces. This disparity has fueled a ballooning EU trade deficit, which hit €360bn in 2025 and is projected to reach €400bn this year. Despite these figures, the political momentum for immediate action has cooled, with major legislative decisions pushed to the autumn. The Commission now finds itself in a precarious position, attempting to project a unified front while national leaders pursue separate diplomatic tracks in Beijing. As Šefčovič meets Wang, the UK is simultaneously navigating its own confrontation with Chinese interests, including a potential billion-pound compensation battle over the nationalization of British Steel, highlighting the growing global friction over Chinese industrial dominance.