EU-China Trade Tensions

EU-China trade tensions are rising amid a large bilateral trade deficit and European concerns over competitive threats. The two sides have entered a three-month window of cooperation to address these issues before the next ministerial meeting in October.

Key Takeaways

• 1.EU-China trade tensions have escalated, with the EU running a EUR376bn annual goods trade deficit with China.
• 2.The EU and China have agreed to cooperate on trade monitoring and will reconvene in October 2026 to avoid further escalation.
• 3.The EU is implementing protective measures like the Industrial Accelerator Act, potential plug-in hybrid tariffs, and cybersecurity restrictions on Chinese firms.

Table of Contents

• EU-China trade tensions
• What was agreed at the June meeting?
• EV tariffs...more to come?
• The Industrial Accelerator Act
• Supply-chain diversification
• Revised Cybersecurity Act
• There's always the bazooka
• Timetable for using the ACI
• EU members want different approaches
• Watch out for retaliation
• What will happen in October?

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