The Record Deficit

The trade imbalance has grown sharply. China's goods trade surplus with the EU hit €360.6 billion in 2025, a 15% increase from 2024, and has expanded by 10% per year on average over recent years . The first quarter of 2026 alone registered a €98 billion deficit, the highest since late 2022, with April 2026 adding another €31.9 billion . Von der Leyen warned that 2025 would be the first year in which all EU member states had a trade deficit with China .

New Trade-Defense Instruments Under Development

Leaders tasked the European Commission with expanding the EU's trade-defense toolbox. Two specific instruments are under development:

• A 'diversification instrument' to reduce reliance on Chinese supply chains.
• An instrument to counter foreign industrial overcapacity .

The broader toolkit under discussion includes tariffs, import quotas, faster anti-dumping investigations, public procurement rules, and subsidy regulations aimed at curbing Chinese state-backed export dominance . Leaders also instructed the Commission to accelerate sector-targeted trade-defense measures, particularly for industries hit hardest by Chinese overcapacity — electric vehicles, steel, and critical raw materials .

Political Pressure for a Tougher Line

EU diplomats reported a "gradual convergence of views" among member states . A broad coalition — spanning free-market-leaning countries and long-term interventionists — now supports tougher action to prevent what some called "Chinese-driven European deindustrialization" .

Von der Leyen called the relationship "unsustainable," noting EU imports from China had risen 46% since 2020 and warning that Europe's economic relationship with China had reached an "inflection point" . France and the European People's Party (EPP) led calls for a harder stance, with EPP chief Manfred Weber saying, "Europe needs to open a new chapter regarding its relationship with China" and "The era of naivety is over" .

Persistent Divisions

Despite the tougher rhetoric, member states remain divided on the pace and severity of measures. The summit's official conclusions avoided naming China directly, referring only to "global macroeconomic imbalances" . The Financial Times reported that EU member states were so divided that European Council President Antonio Costa was reluctant to put the issue to a formal vote . Leaders ultimately sought a "middle ground" to avoid a full-blown trade confrontation .

China's Diplomatic Response

Beijing has long positioned itself as a "partner rather than rival" to the EU. Ambassador Fu Cong stated in March 2026 that China and the EU "are partners rather than rivals and opportunities rather than threats to each other" . Foreign Minister Wang Yi repeated this framing in February 2026, declaring that China and the EU are "naturally partners rather than rivals, still less 'systemic rivals'" .

Behind the diplomatic language, Chinese officials have expressed frustration over Europe's new economic security approach and the suspended ratification of the Comprehensive Agreement on Investment (CAI), viewing the EU's hardening stance as a shift away from partnership . Available reporting from the June 2026 summit does not include a specific, new Chinese diplomatic statement issued in direct response to the summit's outcomes; the closest recent high-level articulation came from Wang Yi in February 2026 .

The summit's outcome leaves the EU in a familiar position: agreed on the problem, stalled on the cure. The hardest decisions were pushed to October, when leaders are expected to revisit concrete measures .

The Record Deficit

The trade imbalance has grown sharply. China's goods trade surplus with the EU hit €360.6 billion in 2025, a 15% increase from 2024, and has expanded by 10% per year on average over recent years . The first quarter of 2026 alone registered a €98 billion deficit, the highest since late 2022, with April 2026 adding another €31.9 billion . Von der Leyen warned that 2025 would be the first year in which all EU member states had a trade deficit with China .

New Trade-Defense Instruments Under Development

Leaders tasked the European Commission with expanding the EU's trade-defense toolbox. Two specific instruments are under development:

• A 'diversification instrument' to reduce reliance on Chinese supply chains.
• An instrument to counter foreign industrial overcapacity .

The broader toolkit under discussion includes tariffs, import quotas, faster anti-dumping investigations, public procurement rules, and subsidy regulations aimed at curbing Chinese state-backed export dominance . Leaders also instructed the Commission to accelerate sector-targeted trade-defense measures, particularly for industries hit hardest by Chinese overcapacity — electric vehicles, steel, and critical raw materials .

Political Pressure for a Tougher Line

EU diplomats reported a "gradual convergence of views" among member states . A broad coalition — spanning free-market-leaning countries and long-term interventionists — now supports tougher action to prevent what some called "Chinese-driven European deindustrialization" .

Von der Leyen called the relationship "unsustainable," noting EU imports from China had risen 46% since 2020 and warning that Europe's economic relationship with China had reached an "inflection point" . France and the European People's Party (EPP) led calls for a harder stance, with EPP chief Manfred Weber saying, "Europe needs to open a new chapter regarding its relationship with China" and "The era of naivety is over" .

Persistent Divisions

Despite the tougher rhetoric, member states remain divided on the pace and severity of measures. The summit's official conclusions avoided naming China directly, referring only to "global macroeconomic imbalances" . The Financial Times reported that EU member states were so divided that European Council President Antonio Costa was reluctant to put the issue to a formal vote . Leaders ultimately sought a "middle ground" to avoid a full-blown trade confrontation .

China's Diplomatic Response

Beijing has long positioned itself as a "partner rather than rival" to the EU. Ambassador Fu Cong stated in March 2026 that China and the EU "are partners rather than rivals and opportunities rather than threats to each other" . Foreign Minister Wang Yi repeated this framing in February 2026, declaring that China and the EU are "naturally partners rather than rivals, still less 'systemic rivals'" .

Behind the diplomatic language, Chinese officials have expressed frustration over Europe's new economic security approach and the suspended ratification of the Comprehensive Agreement on Investment (CAI), viewing the EU's hardening stance as a shift away from partnership . Available reporting from the June 2026 summit does not include a specific, new Chinese diplomatic statement issued in direct response to the summit's outcomes; the closest recent high-level articulation came from Wang Yi in February 2026 .

The summit's outcome leaves the EU in a familiar position: agreed on the problem, stalled on the cure. The hardest decisions were pushed to October, when leaders are expected to revisit concrete measures .