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Fifty years into formal diplomatic ties, EU-China relations face renewed strain, as escalating trade disputes, deepening strategic mistrust, and geopolitical divergence dominate the summit agenda.
Image Source: Getty Images
The EU-China summit, scheduled for 24 July 2025, marks the 50th anniversary of EU-China diplomatic relations. Yet, as the summit takes place against a contentious backdrop of EU-China trade and security tensions, the mood is anything but celebratory.
Originally set to take place in Brussels, the summit was moved to Beijing after Chinese President Xi Jinping declined the invite. The meeting has also been shortened to one day, rather than the planned two, with the second day designated for a business summit in China’s Anhui province, with no clarity regarding Xi’s attendance. Instead, Premier Li Qiang may chair the summit with European Commission President Ursula von der Leyen and European Council President Antonio Costa representing the EU. Scant progress on trade talks also prompted the EU to cancel the preparatory pre-summit High-Level Economic and Trade Dialogue with Chinese officials.
In the early days of Trump’s 2.0, a far cry from the Biden era where transatlantic allies presented an aligned front on China, it seemed like EU-China ties were thawing. Von der Leyen’s speech at Davos emphasised constructive engagement with China. Several diplomatic overtures ensued, with China’s charm offensive portraying Beijing, in contrast to Washington, as a reliable partner for Europe. Meanwhile, EU Trade Commissioner Maroš Šefčovič visited Beijing in March 2025 to rebalance trade relations.
Prospects for a potential EU-China rapprochement of sorts seemed promising, given the Trump administration’s trade disruptions and the upending of the transatlantic partnership, presenting opportunities for an EU-China reset. However, indications of tensions easing between Brussels and Beijing have been limited, with the issue of trade diversion resulting from Trump’s tariffs compounding the EU’s laundry list of grievances vis-à-vis China.
Rifts over trade in electric vehicles (EVs), alcohol, pork, medical devices, and rare earths have triggered allegations, retaliations, and investigations into each other’s industrial policies and trading practices. These disputes are underpinned by structural issues, including limited access for European companies in China and persistent trade deficits.
Going into the summit, a key priority for the EU, which is dependent on China for 98 percent of its rare earth supply, is to secure access to these critical components for many EU manufacturing sectors and clean technologies.
Going into the summit, a key priority for the EU, which is dependent on China for 98 percent of its rare earth supply, is to secure access to these critical components for many EU manufacturing sectors and clean technologies. Earlier this year, China introduced export restrictions on rare earths, aimed primarily at the US but also affecting EU industries, resulting in a decrease in the value of rare earth shipments to the bloc by 84 percent in the first half of 2025, while also disrupting supply chains for European manufacturers. In a sharp rebuke at the G7 summit in Canada, von der Leyen accused China of “dominance, dependency, and blackmail” in weaponising rare earth supplies, drawing sharp condemnation from Beijing.
Last year, the EU imposed tariffs of 45 percent on Chinese EVs, following China’s subsidised overcapacity, which has resulted in a rapid increase in the presence of these EVs in Europe and posed unfair competition to the bloc’s domestic auto industry. Similar issues have riddled other sectors, including solar panels, wind turbines, and steel. China retaliated by launching anti-dumping investigations into European pork exports worth €1.75 billion, of which it is the world’s largest consumer, and slapping duties on European brandy. An import surveillance task force that the EU set up to monitor the re-routing of trade flows revealed an uptake of 8.2 percent in Chinese exports to the bloc following Trump’s initial tariffs of 145 percent on Chinese products, further exacerbating the issue of these goods flooding European markets. In response to restricted access to public procurement in the Chinese market, the EU used its International Procurement Instrument (IPI), adopted in 2022, for the first time to limit Chinese access to EU med-tech tenders exceeding €5 million. These issues have contributed to the EU’s massive trade deficit with China, which in 2022 stood at €400 billion, and in 2023, almost €300 billion. According to data accessed by The Economist, Chinese exports to the EU rose by 7 percent in the first half of 2025, while imports reduced by 6 percent. Both sides are now seeking concessions by leveraging their respective strengths in negotiations. China, for instance, seeks to replace the EU’s existing EV tariffs with minimum price commitments for Chinese EVs.
European security concerns have escalated given Beijing’s tacit support for Moscow’s war effort through dual-use technology supplies and energy purchases, alongside the deepening of the Russia-China “no limits partnership”.
Meanwhile, European security concerns have escalated given Beijing’s tacit support for Moscow’s war effort through dual-use technology supplies and energy purchases, alongside the deepening of the Russia-China “no limits partnership”. May 2025 marked Xi’s third visit to Russia since the invasion of Ukraine in February 2022, where he was Russian President Vladimir Putin’s guest of honour at the Victory Day parade. To make matters worse, China’s Foreign Minister Wang Yi recently stated that it was not in his country’s interest for Russia to lose the war, since this would redirect America’s focus back to China and the Indo-Pacific. Moreover, Chinese cyber-attacks on European targets and the country’s military build-up in the Indo-Pacific have unsettled Europeans. In turn, the EU’s increased involvement in the Indo-Pacific and support for Taiwan have remained sources of concern for China.
Then there is the perennial problem of forging unity amongst EU member states, which have their own interests and approaches towards Beijing, and often undermine the EU’s more hawkish approach. Beijing has frequently exploited these differences and played divide-and-rule in Europe. German Chancellor Friedrich Merz’s trip to China later this year, with an accompanying business delegation as is customary, will once again test the bloc’s cohesion.
Chinese cyber-attacks on European targets and the country’s military build-up in the Indo-Pacific have unsettled Europeans. In turn, the EU’s increased involvement in the Indo-Pacific and support for Taiwan have remained sources of concern for China.
One recent positive development has been the lifting of tit-for-tat sanctions imposed in 2021, which followed China’s sanctioning of European Members of Parliament (MEPs) and analysts affiliated with think tanks, in response to EU measures targeting Chinese officials over alleged human rights abuses in Xinjiang. This suspended the ratification of the EU-China Comprehensive Agreement on Investment (CAI), aimed at enhancing market access and bettering conditions for European firms operating in China. On most other irritants, though, there has been little meaningful progress.
Despite the EU’s 2019 three-pronged strategic outlook on China, European perceptions have increasingly shifted towards the competitor and systemic rival aspects, with the partner element primarily retaining relevance in the realm of climate action. The EU has embarked on a mission to diversify and de-risk its relations with China; a steady deterioration in ties has resulted in a trend where summits, intended as platforms for constructive dialogue, have become progressively more challenging each year, marked by low expectations and limited deliverables. The 2022 EU-China summit was infamously dubbed “the dialogue of the deaf” by then EU foreign policy chief Josep Borrell; and like the 2023 edition, the upcoming summit is once again expected to yield a press release rather than a bilaterally agreed joint statement.
The EU has embarked on a mission to diversify and de-risk its relations with China; a steady deterioration in ties has resulted in a trend where summits, intended as platforms for constructive dialogue, have become progressively more challenging each year, marked by low expectations and limited deliverables.
Both the EU and China have been preoccupied with parallel trade negotiations with Washington. While China managed to secure a somewhat shaky deal in June, the EU was slapped with a 30 percent tariff rate. A potential provisional transatlantic trade deal ahead of Trump’s August 1 deadline and prior to the upcoming EU-China summit may embolden the EU’s position towards China. Yet, it is evident that against the backdrop of Trumpian unpredictabilities, European and Chinese markets need each other.
Whether the summit will see a more substantial redressal of fundamental divergences and the offering of concessions, or merely serve as a platform to air differences, remains to be seen. Pacifying a more assertive EU, armed with an expanded defensive toolkit, may prove easier said than done unless Beijing genuinely acknowledges the many structural issues plaguing the relationship and alters its course.
Shairee Malhotra is the Deputy Director of the Strategic Studies Programme at the Observer Research Foundation.
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Shairee Malhotra is Deputy Director - Strategic Studies Programme at the Observer Research Foundation. Her areas of work include Indian foreign policy with a focus on ...
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