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China’s Economic Power and China 2.0: Relaxation or Trade War?

The EU trade deficit with China grows higher every day. As Germany and France take harder stance toward China, how will China react?
© PD European Commission / Photo by Lukasz Kobus (Handshake between Wang Wentao, Chinese Minister of Commerce, and Maroš Šefčovič, European Commissioner for Trade and Economic Security, from left to right, 29/06/2026.)

Update (28.10.2026): Commentary: China’s technological rise offers lessons for Europe’s pursuit of digital sovereignty (Rapporteur)

Update (28.10.2026): News: EU business chief cautions against focusing solely on China’s trade surplus (Rapporteur)

Update (26.10.2026): News: German President Frank-Walter Steinmeier prepares China visit amid growing trade tensions and calls for fair competition (South China Morning Post, Pollar News)

Update (20.10.2026): Analysis: How economic chokepoints risk trapping the US in geopolitical confrontation (Foreign Affairs)

Update (20.10.2026): News: China threatens retaliation if UK follows EU tariffs (POLITICO)

Update (19.10.2026): Commentary: Europe’s new trade instrument cannot come soon enough (Rapporteur⁠)

Update (15.10.2026): Analysis: Beijing seeks to reduce European influence over Chinese systems (ECFR⁠)

Update (15.10.2026): News: Von der Leyen considers new restrictions on Chinese chemicals and machinery (POLITICO⁠)

Update (15.10.2026): Interview: China expert Noah Barkin sees growing EU unity on tougher China trade policy after Germany’s shift (Euronews⁠)

Update (15.10.2026): News: UK signals possible alignment with EU tariffs on Chinese EVs (POLITICO⁠)

Update (14.10.2026): Interview: MEP Bernd Lange calls EU-China talks a ‘good starting point’ (YouTube⁠)

Update (14.10.2026): Analysis: Šefčovič’s China trade breakthrough (POLITICO⁠)

Update (12.10.2026): News: EU says hybrid car deal with China will not prevent further trade measures against Beijing (Rapporteur⁠)

Update (12.10.2026): News: China gives more details about trade talk with EU trade chief Maroš Šefčovič (Reuters)

Update (11.10.2026): News: Macron calls for EU preference in the automotive industry amid growing Chinese competition at Paris Motor Show (Euronews⁠)

Update (10.10.2026): Analysis: EU faces mounting pressure from China amid escalating trade tensions (Rapporteur⁠)

Update (09.10.2026): News: EU trade chief hails crucial first step as talks with Beijing help avert a trade war (EUobserver⁠)

Update (09.10.2026): News: EU and China reach understanding to curb Chinese hybrid car exports to Europe (POLITICO⁠)

Update (08.10.2026): Analysis: EU trade chief Maroš Šefčovič faces Brussels’ limited leverage in trade negotiations (EUobserver)

Update (07.10.2026): Analysis: Europe faces three tests in reducing dependence on China and countering Chinese economic coercion (ECFR⁠)

Update (06.10.2026): News: EU trade chief heads to China with low expectations(EUobserver⁠), Rapporteur)

Update (05.10.2026): News: Merz and Macron push tougher EU trade response to China (POLITICO⁠)

Update (04.10.2026): News: Britain expected to impose tariffs on Chinese electric vehicles (Reuters⁠)

Update (01.10.2026): Commentary: EU unity and leverage will determine whether it can stand up to China on trade (Carnegie Europe⁠)

Update (30.09.2026): News: China vows response if EU introduces measures targeting Chinese trade (Reuters⁠)

Update (29.09.2026): News: EU eyes tariffs on Chinese goods with new trade weapon (Rapporteur⁠)

Update (28.09.2026): Analysis: EU-China trade showdown increasingly appears inevitable (Internationale Politik Quarterly⁠) 

Update (18.09.2026): News: Beijing urges EU to weaken ‘Made in Europe’ industrial bill (EUobserver⁠)

Update (17.09.2026): Analysis: EU firms redesign supply chains amid geopolitical risks (EIB⁠)

Update (17.09.2026): News: EU asks China to voluntarily limit hybrid car exports (Financial Times⁠)

Update (16.09.2026): News: Von der Leyen warns EU-China trade deficit has hit ‘tipping point’ (POLITICO⁠)

Update (15.09.2026): Analysis: European businesses caught between US-China trade and tech war (POLITICO⁠)

Update (11.09.2026): News from China: Chinese experts warn EU protectionism cannot fix industrial woes (Global Times⁠)

Update (09.09.2026): News: EU spirits exports squeezed by US-China trade tensions (Euractiv⁠)

Update (08.09.2026): News: EU warns China to buy more European goods or risk trade war (Euractiv⁠)

Update (08.09.2026): News: China’s exports accelerate on autos and high-tech goods (Euronews⁠)

Update (07.09.2026): News: Commission proposes anti-China EU procurement rules (Euractiv⁠)

Update (02.09.2026): Interview: Šefčovič warns China of harsher measures by October (YouTube)

Update (02.09.2026): News: Think tank urges UK-EU cooperation against China (POLITICO)

Update (01.09.2026): Analysis: EU split over courting Chinese factories (EUobserver)

Update (31.08.2026): News: EU seeks to curb Chinese exports (POLITICO)

Update (31.08.2026): Commentary from China: Europe risks miscalculating a trade war with China (Global Times⁠) 

Update (31.08.2026): News: Hoekstra says Beijing weaponised clean-tech dominance (Euractiv)

Update (31.08.2026): Interview: Hoekstra says China isn’t playing by trade rules (YouTube)

Update (27.08.2026): Dutch think tank urges tougher China tariffs (EUobserver)

Update (27.08.2026): Von der Leyen warns China on trade (Euractiv)

Quick Brief:

The EU recorded a €21.8 billion goods deficit in Q2 (April–June) 2026, after a €6.7 billion surplus in Q1 (January–March)

The main driver was energy: the deficit in energy products widened to €101.1 billion

Imports rose by €63.4 billion, considerably more than the €34.9 billion increase in exports

The EU’s trade deficit with China reached €103.3 billion in Q2, adding to concerns over European industrial competitiveness

Sources: Eurostat, Euractiv

Transparency Note: Use of AI

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