Persuading China that its €1bn daily trade surplus with the EU is not sustainable was always going to be a hard sell for EU trade commissioner Maroš Šefčovič.  

And the early signs are that Šefčovič’s two days of talks with Chinese commerce secretary Wang Wentao, which conclude on Friday (9 October), are not going to deliver the breakthrough demanded by EU leaders when they gather for a summit in Brussels next week. 

“The message around the table was clear: the need to improve access to the Chinese market, while boosting our economic security,” Šefčovič posted on X ahead of the first day of talks. 

But rhetoric aside, three months after the EU Commission set up a series of ‘work streams’ with Chinese officials, with a mandate to address the multi-layered EU-Sino trade dispute, it is hard to see much tangible progress. 

Hours before Šefčovič arrived, Beijing rejected an EU demand for so-called “voluntary export restrictions” on its electric vehicles (EVs). 

In August, data published by Schmidt Automotive Research found that 14 percent of EV sales across Europe this year were Chinese-made, up from 9.4 percent last year. 

That is despite the EU imposing additional tariffs of between 17 and 36 percent on Chinese EVs in October 2024. 

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For years, the European Union has struggled with a peculiar contradiction in its dealings with China. The EU is one of the largest and wealthiest trading blocs on earth, capable of determining access to a market of some 450 million relatively affluent consumers, yet it frequently conducts foreign policy as though it were the supplicant.

Hilde Vautmans, the Belgian Renew Europe MEP and European Parliament rapporteur on EU-China political relations, is right to challenge this timidity.

Her report, debated this week in Strasbourg, does not advocate severing relations with Beijing. Nor should it. China is too economically important and too influential on questions ranging from climate change to international security for Europe simply to close the door.

But dialogue must not become an alternative to action.

“Europe has economic power. It’s time to use it,” Vautmans told Parliament ahead of the vote. That sentence ought to be pinned above every desk in the European Commission dealing with China.

The figures make the case brutally clear. In 2025 the EU imported €559.4 billion of goods from China while exporting just €199.6 billion in the opposite direction. The resulting deficit was €359.8 billion — almost €1 billion every day.

As EU Today reported recently, Commission President Ursula von der Leyen has herself warned of a potential “second China shock”, with subsidised Chinese industrial production threatening European manufacturers.

Fine words. But Beijing has heard fine words before.

The Commission’s preferred formulation remains “de-risking, not decoupling”. There is sense in that distinction. Nobody seriously proposes shutting down trade with the world’s second-largest economy. But de-risking becomes meaningless if every risk identified is followed by another dialogue, another working group and another opportunity to postpone difficult decisions.

Indeed, the Commission acknowledges that European companies operating in China face regulatory obstacles, inadequate intellectual-property protection, restrictions on data flows and pressures associated with technology transfer.

Europe possesses formidable weapons with which to respond: anti-dumping duties, anti-subsidy measures, foreign-investment screening, the Foreign Subsidies Regulation, the Anti-Coercion Instrument, procurement restrictions and controls on strategically sensitive technologies.

These instruments should not be deployed indiscriminately. But neither should they sit polished in the armoury while Beijing exploits European openness.

Vautmans is particularly right to connect economics with security and values. China cannot reasonably expect privileged access to European markets while helping sustain the Russian war machine. The European Parliament’s own research service describes Beijing as a “decisive enabler and dual-use provider”, including through goods entering Russian weapons and drone supply chains.

If Chinese companies materially assist Russia’s ability to wage war against Ukraine, Europe should be prepared to impose a direct economic price. The same principle should apply to human rights.

EU Today has warned repeatedly that Brussels’ ritualised engagement with Beijing risks becoming precisely that: ritual.

We reported earlier that the EU-China Human Rights Dialogue risks losing credibility, pointing to the continuing imprisonment of Swedish citizen Gui Minhai and Uyghur academic and Sakharov Prize laureate Ilham Tohti. After round upon round of discussions, Beijing has learnt that European expressions of “deep concern” are inexpensive things to endure.

The problem is hardly new. Years ago, EU Today highlighted calls for concrete EU action over goods associated with forced labour in China, including demands for tougher restrictions on entities implicated in abuses against Uyghurs.

Yet repression continues. In March this year China adopted its new Law on the Promotion of Ethnic Unity and Progress. The European Parliament subsequently condemned what it described as intensified repression and assimilation affecting Tibetans, Uyghurs and other minorities, by the overwhelming margin of 439 votes to 52.

Europe therefore faces a straightforward question. What is the purpose of economic power if it is never translated into political influence?

The EU should not attempt to bully China. Nor should it abandon diplomacy. Vautmans is correct that channels of communication must remain open. But reciprocity must become something more than a word appearing in communiqués.

Where China closes markets to European companies, Europe should be prepared to restrict equivalent access. Where state subsidies distort competition, Brussels should respond rapidly with trade-defence measures. Where strategic dependencies expose Europe to political coercion, alternative supply chains must be built. Where Chinese entities support Russia’s military-industrial complex, sanctions should follow. And where companies benefit from forced labour or serious human-rights abuses, access to the European marketplace should carry consequences.

That is not protectionism. It is leverage.

Totalitarian states understand leverage perfectly well. China routinely uses access to its enormous market as an instrument of statecraft. Europe, by contrast, too often behaves as though exploiting its own commercial strength would somehow represent a failure of diplomacy. It represents precisely the opposite.

The European Commission has spent years discovering that China is simultaneously a partner, competitor and “systemic rival”. It is time to move beyond discovering the obvious.

Vautmans has identified the essential point. Europe already possesses economic power on a scale few countries can ignore. What it appears to lack is the political confidence to use it.

Main Image: by Valentine ZELER, © European Union 2026 – Source : EP

Production: By Europod, in co-production with Sphera Network.

EUobserver is proud to have an editorial partnership with Europod to co-publish the podcast series “Briefed” hosted by Léa Marchal. The podcast is available on all major platforms.

Find the full transcript below: 

Chinese carmakers are taking an increasing share of the European car market, particularly when it comes to electric vehicles. Why are European carmakers now opening their factories to their Chinese competitors?

Until recently, the main concern in Europe was Chinese-made electric vehicles being imported into the EU. That’s why, two years ago, the EU imposed hefty tariffs on Chinese electric cars.

But Chinese manufacturers have found another way into the European market: they are setting up production here. Some are building factories of their own. Others are entering partnerships with European carmakers and using their existing production sites.

That’s the case with Stellantis and Chinese manufacturer Leapmotor. And now Dongfeng is also negotiating to produce cars at the French plant of Rennes La Janais. Because by moving production to Europe, Chinese manufacturers may be losing one of their main advantages, which is cheap labour.

But low labour costs are only one part of their competitive edge.

Chinese manufacturers also continue to benefit from state support. And setting up production in Europe doesn’t necessarily mean building brand-new factories.

In many cases, Chinese companies are looking to partner with European manufacturers and use factories that are already there — factories that are no longer operating at full capacity. That means they can save significantly on investment costs. And they can also rely on their European partners’ existing sales and distribution networks.

So how big is this Chinese presence in Europe becoming? For 2028, there are already 12 projects involving Chinese carmakers setting up production in Europe. Several are in Spain, with others in France, Belgium, Slovakia, Hungary, Sweden and Austria.

Now, why would European manufacturers allow their Chinese competitors to produce cars in their own factories? Part of the answer is that European carmakers are struggling to keep up in electric vehicles sells. And that is contributing to factory closures and job losses.

European manufacturers have to meet EU targets on average CO2 emissions each year. And producing more electric vehicles is necessary to meet those requirements.

So partnerships with Chinese manufacturers can serve two purposes: they can help European companies fulfilling their green cars objectives, while also keeping existing factories and jobs running.

Though there is a longer-term risk for European manufacturers. The more Chinese companies establish themselves in Europe, the more competitive pressure they could put on European brands — potentially even leading to takeovers. That has happened before: Volvo Cars, for example, was acquired by Chinese group Geely in 2010. 

In Germany, carmakers are for now refusing to open the doors of their production sites to the Chinese. But they do have partnerships with Chinese companies to produce vehicles in China, where they can benefit from lower production costs. That explains why they were very much opposed to imposing tariffs on Chinese electric vehicles.

But the situation is now changing. Volkswagen closed its Dresden factory last year, and other German plants are also facing closure risks. Germany’s car industry is therefore increasingly joining calls for stronger protection against Chinese competition.

And that brings us back to the Franco-German paper that is circulating in Brussels, which calls for measures to restrict Chinese access to the European market.

Because this debate goes well beyond cars. The EU is increasingly concerned about Chinese competition and dependence in a range of strategic industries. This will be discussed next week, when EU leaders meet in Brussels.

The European Commission could also present a new so-called “diversification” tool, either at the summit or around it. One possibility would be to require companies not to rely exclusively on China for certain critical materials. Something which could trigger what we call a trade war. I’ll be following that very closely!

Growth potential across Central and Eastern Europe has fallen sharply from the levels seen around EU accession, with ageing populations, weak productivity, Chinese competition and slower German industry increasingly testing the region’s economic convergence.

The economic model that transformed Central and Eastern Europe after EU accession is losing momentum, according to the International Monetary Fund, which is warning governments that structural reforms are needed if the region is to continue narrowing the income gap with Western Europe.

Carlos Mulas-Granados, the IMF’s regional representative, said on Tuesday that medium-term growth potential across Central and Eastern Europe had declined to around 2.5 per cent, compared with roughly 5 per cent before countries in the region joined the European Union.

The slowdown does not mean that every economy is stagnating. Poland continues to grow faster than much of Western Europe, while the Czech economy has recovered from recent shocks. The concern is instead about the underlying rate at which these economies can expand once temporary fiscal stimulus, EU funding and post-crisis recoveries are stripped out.

Several of the forces behind the region’s earlier success are becoming weaker.

EU accession opened access to the single market, attracted foreign investment and integrated Poland, Czechia, Slovakia and Hungary deeply into European industrial supply chains. German manufacturers in particular moved production eastwards, taking advantage of lower labour costs, skilled workforces and geographic proximity.

That process generated rapid gains in productivity and incomes. It cannot simply be repeated.

Demographics are one of the most immediate constraints. Working-age populations are shrinking across much of the region while ageing increases spending requirements for pensions, health care and social support.

The IMF’s country assessments illustrate the problem. Its assessment of Poland says demographic pressures are mounting even as labour productivity remains comparatively strong, and calls for higher labour participation, better skills and deeper capital markets.

In Slovakia, the Fund expects growth of only 0.9 per cent this year and says adverse demographics and weaker productivity are weighing on the medium-term outlook. The economy remains particularly exposed to manufacturing and the automotive industry.

The Czech Republic faces a similar structural constraint. The IMF estimates its medium-term potential growth at around 1.8 per cent, with population ageing and modest productivity gains limiting further convergence.

External conditions have also changed.

Germany, the region’s principal industrial partner, has experienced prolonged weakness in manufacturing. Central European producers therefore face softer demand from the market around which many of their supply chains were originally built.

At the same time, China has moved from being primarily a source of imports and components to a direct competitor in sectors where Central Europe has substantial industrial exposure, including cars, batteries, machinery and electrical equipment.

That combination is particularly difficult for economies built around export-oriented manufacturing.

The problem overlaps with the wider European competitiveness debate. EU Today reported in July that only 15.7 per cent of the reforms recommended in Mario Draghi’s competitiveness report had been fully implemented at that stage, with important work still outstanding on capital markets, energy and investment.

For Central Europe, progress on those issues has a direct bearing on growth. Smaller national capital markets make it harder for companies to finance expansion. Fragmented energy systems add to industrial costs, while limited access to venture capital can restrict the development of businesses outside established manufacturing sectors.

There are significant differences between countries. Poland’s larger domestic market gives it more insulation from industrial weakness elsewhere and the IMF expects relatively strong growth. Hungary has faced a different combination of weak investment and fiscal constraints, while Slovakia’s dependence on car production leaves it particularly exposed to changes in the European automotive sector.

EU funding remains an important source of investment across the region, particularly for infrastructure and modernisation. But EU transfers cannot by themselves replace improvements in productivity.

The IMF’s argument is therefore less about an immediate recession than about the end of an unusually favourable period of convergence.

Central Europe entered the EU with lower wages, substantial scope to import Western technology and a powerful incentive for Western European manufacturers to move production eastwards. As those gaps narrow, future growth depends more heavily on innovation, skills, investment and domestic productivity.

The region is still converging with Western Europe. The question raised by the latest IMF warning is how quickly that process can continue once the economic advantages that powered its first two decades of EU membership become less powerful.

Beyond all the pageantry, the Chinese leader Xi Jinping had a strategic goal for his Washington visit – to undermine the American relationship with Japan. Xi succeeded, perhaps beyond his expectations. Japanese policy makers saw this coming. They arranged a brief meeting on the sidelines of the United Nations General Assembly between Prime Minister Takaichi […]

The post How China deploys wartime history against Japan appeared first on Asia Times.

TOKYO – For decades, the US enjoyed a remarkable luxury: its two biggest creditors, Japan and China, kept showing up at Treasury auctions with checkbooks open. Now, Donald Trump’s trade wars, tariff threats and widening geopolitical confrontations raise an uncomfortable question: what happens if Washington’s most reliable bankers decide they’ve had enough? Granted, global investors […]

The post When Asia’s central banks turn bond vigilante on Trump appeared first on Asia Times.

Iran’s economic adaptation over decades, marked by domestic production, regional trade and Asian partnerships, is on course to thwart Washington’s economic terrorism.

Press TV – October 6, 2026

US Treasury Secretary Scott Bessent’s prediction that Iran’s economy would soon collapse underscores the depth of delusion within the current American leadership.

“Iran is absolutely not sanctionable,” Deputy Economy Minister Mortaza Zamanian said this week as Tehran worked to keep trade flowing despite Washington’s latest sanctions campaign.

Zamanian cited Iran’s extensive borders, established commercial routes and longstanding trading relationships, saying that they make it impossible for external pressure simply to switch off the country’s economy.

His remarks came as Washington intensified its economic terrorism against Iranian oil, shipping, aviation, finance, technology and foreign companies supporting those sectors.

The new American campaign has been accompanied by extraordinary predictions from senior American officials, including Treasury Secretary Scott Bessent’s claim that Iran could have “nothing left to trade” within two weeks.

Speaking on September 27, Bessent claimed that Iran would probably make its final oil deliveries to China within two weeks, after which, he asserted, “they will have nothing.”

That prediction deserves comparison with history, because American administrations have imposed increasingly severe sanctions on Iran since 1979 while repeatedly expecting economic pressure eventually to produce collapse.

Yet the economy did not disappear, and Iran instead developed domestic industries, expanded regional commerce, strengthened trade with Asian powers and accumulated extensive experience operating outside Western financial channels.

The proposition that an economy which has absorbed American sanctions for almost half a century will suddenly disintegrate within two weeks therefore indicates the depth of delusion among the current US leadership.

Iran enters this confrontation possessing a large domestic market, extensive productive capacity, enormous energy resources and deeply established commercial relationships across Eurasia.

These are not temporary sanctions evasions assembled during the present crisis, but economic capabilities developed over decades through investment, industrial learning, regional integration and repeated adaptation to external restrictions.

The most important fact about Iran’s economic structure is its size, because a country with more than ninety million people possesses a domestic market capable of supporting extensive production independently of Western consumers.

The World Bank describes Iran as relatively diversified for an oil-exporting economy, with a substantial domestic market, a large workforce and significant activity across manufacturing, agriculture and services.

That domestic market sustains production across food, pharmaceuticals, construction materials, steel, petrochemicals, machinery, transportation, consumer goods and numerous intermediate industrial sectors serving Iranian households and companies.

Iran is therefore not an economy that must export continuously merely to keep its factories operating, because a substantial portion of its production already serves domestic consumption, investment and infrastructure.

That distinction becomes particularly important when external restrictions are designed around the assumption that cutting foreign trade will automatically paralyze domestic economic activity.

A country whose productive system is centered on domestic demand possesses an economic engine that continues operating even when international transactions become more complicated.

Iran has also spent decades building industrial capabilities specifically suited to its own resource base, population, infrastructure requirements and energy-intensive economy.

Steel production, petrochemicals, cement, refining, power generation, construction, food processing and pharmaceuticals represent substantial industrial ecosystems involving domestic engineering, manufacturing, logistics and skilled employment.

These capabilities have repeatedly expanded during periods when access to Western investment and technology was severely restricted, demonstrating that Iranian industrial development does not depend upon continuous Western participation.

Iran’s long exposure to sanctions has produced another asset that cannot be imposed or removed through a Treasury designation, namely a large body of accumulated technical and commercial experience.

When foreign manufacturers withdraw, Iranian companies have learned to redesign equipment, substitute components, develop domestic suppliers and work with companies from countries willing to maintain commercial relationships.

Academic research has documented this process in Iranian industries, including evidence that sanctions simultaneously restricted access to foreign technology while encouraging the development of domestic technological capabilities.

The resulting industrial knowledge extends beyond individual companies, because engineers, technicians, procurement specialists and managers have accumulated practical experience with restricted supply chains over successive decades.

A manufacturer that has operated under sanctions for years does not design its procurement system around the assumption that every international supplier will remain available indefinitely.

It develops alternatives as part of ordinary business planning, creating a commercial culture in which substitution, regional sourcing and domestic production are integrated into industrial decision-making.

This is one of the strongest reasons the prediction of sudden economic emptiness looks disconnected from Iran’s actual economic structure.

There is no single foreign supplier whose disappearance can remove Iran’s entire industrial capacity, because Iranian production is distributed across thousands of domestic enterprises and numerous regional supply relationships.

The system has been shaped by scarcity for so long that adaptation has become embedded within the operating methods of Iranian companies themselves.

Iran’s geographical position provides another form of economic strength that cannot be erased by financial sanctions, because the country physically connects several of the world’s most important commercial regions.

Iran borders Turkey, Iraq, Armenia, Azerbaijan, Turkmenistan, Afghanistan and Pakistan, while its southern coastline provides direct access to the Persian Gulf and Gulf of Oman.

Those borders connect Iranian commerce with the Caucasus, Central Asia, South Asia, the Persian Gulf, Turkey and Iraq, creating commercial possibilities extending in several directions simultaneously.

This geography gives Iran direct access to neighboring markets while also placing the country along important transportation corridors linking Russia, Central Asia and the Indian Ocean.

The significance of Zamanian’s argument is therefore practical rather than rhetorical, because no financial authority can relocate Iran away from its geographic position.

Goods can move through different borders, suppliers can be found in different countries and exporters can redirect shipments towards different markets when commercial conditions change.

Iran has consequently developed a regional trading system that does not depend upon one border, one port, one customer or one foreign economic relationship.

Its trade with Iraq, Turkey, the United Arab Emirates, Afghanistan, Pakistan, the Caucasus, Central Asia and China represents an extensive commercial geography developed through years of interaction.

The World Bank has documented precisely this shift, noting that Iranian trade has increasingly pivoted towards neighboring countries and China as sanctions have restricted conventional international economic relationships.

That transformation is now an established feature of Iran’s economy rather than an emergency measure invented after the latest American escalation.

China gives Iran’s economic system another dimension because it combines enormous industrial capacity with sustained demand for Iranian energy and other commodities.

In other words, Iran possesses access to a major global market even while facing comprehensive American restrictions on its oil industry.

China also supplies Iranian companies with machinery, manufactured products, electronics, industrial equipment and intermediate goods required across the domestic production system.

The relationship therefore operates in both directions, with Iran supplying commodities and China supplying industrial goods, creating a commercial relationship considerably broader than the simple sale of sanctioned oil.

Iran consequently does not need unrestricted access to every Western market when it possesses substantial trade relationships with China and numerous neighboring economies.

Iran’s energy resources provide perhaps the clearest demonstration of the country’s underlying economic strength.

It ranks second globally in proven natural-gas reserves and fourth in proven crude-oil reserves, giving the country extraordinary resource depth beneath its existing industrial economy.

These resources provide not merely potential export earnings but also abundant domestic energy and petrochemical feedstocks supporting Iran’s manufacturing, electricity generation, transportation and industrial production.

Iran has consequently developed an extensive downstream economy that converts hydrocarbons into refined products, petrochemicals and industrial inputs rather than relying exclusively upon crude-oil exports.

The World Bank has specifically noted that sanctions encouraged additional processing of crude oil and hydrocarbons into petrochemicals, illustrating how restrictions have contributed to changes within Iran’s economic structure.

The country’s resource base also gives it a durable position in Asian energy markets, where large industrial economies require reliable supplies of oil and petrochemical products.

That is why American attempts to eliminate Iranian oil revenue confront persistent commercial demand rather than an absence of buyers interested in Iranian resources.

The financial system represents another area where Iran has developed substantial independent capacity after decades of exclusion from conventional Western banking.

Iran’s economic ties span a broad network of foreign entities, reflecting its commercial reach across banking, shipping, logistics, commodities, and manufacturing.

Against this background, Bessent’s latest prediction appears less to be an independent economic forecast than an expectation based on what the American campaign is intended to achieve.

His claim that Iran will have nothing left to trade within two weeks assumes that removing one major source of oil revenue effectively removes the economic foundations supporting the entire Iranian system.

Iran’s actual economic structure is considerably broader, because oil exports represent one component of national economic activity alongside manufacturing, agriculture, services, domestic consumption and regional commerce.

The World Bank estimates that Iran’s economy contracted during the Iranian year ending March 2026, while simultaneously describing an economy that has adapted to sanctions through changing trade patterns and alternative payment mechanisms.

Those facts should not be confused with economic collapse, because contraction in a particular period is fundamentally different from the disappearance of productive capacity, markets and commercial institutions.

The historical record is even more significant, because American sanctions have been imposed repeatedly since 1979 and have been intensified dramatically during successive administrations.

The sanctions regime has targeted Iranian banking, oil exports, investment, technology, shipping and foreign companies, with especially severe measures introduced during the 2010s and after Washington abandoned the nuclear agreement.

Iran nevertheless retained its industrial base, rebuilt oil exports after earlier restrictions, expanded non-oil exports and redirected a growing share of trade towards neighboring countries and China.

The American expectation that economic pressure would eventually produce decisive Iranian economic capitulation has therefore been tested repeatedly against an economy that continued adapting.

Predicting that a strategy that failed to trigger economic collapse over half a century will suddenly achieve it within fourteen days merits no serious consideration, because it reveals the naivety of its proponents.

Washington now possesses powerful financial tools, but financial power does not eliminate Iran’s factories, oilfields, farms, engineers, consumers, borders, ports, regional markets or established commercial relationships.

Iran enters the current phase with an economic architecture extending from domestic manufacturing plants to Chinese refineries, from Persian Gulf shipping networks to northern Eurasian trade corridors.

Its domestic market provides magnitude and size, its industrial base provides production, its energy reserves provide commodities and its geography provides access to several major commercial regions.

In other words, Iran already possesses the domestic capabilities and international relationships required to keep its economy operating beyond the reach of any single American economic sabotage.

France and Germany have proposed giving the European Commission powers to respond within days to serious trade distortions, including the possibility of restricting access to the EU single market. The initiative comes as European concern grows over Chinese subsidies, industrial overcapacity and dependence on critical imports.

French President Emmanuel Macron and German Chancellor Friedrich Merz have called for a new European Union trade instrument capable of acting rapidly against countries whose economic practices cause serious disruption to the European market.

In a joint initiative sent to European Commission President Ursula von der Leyen on Monday, the two governments proposed strengthening the EU’s ability to respond to what they describe as systemic market distortions, including dumping, widespread subsidies and restrictions affecting access to critical supplies.

The Franco-German proposal does not formally identify China as its target. However, many of the practices it describes correspond directly to long-standing European concerns over Chinese industrial policy, including excess manufacturing capacity, state support and restrictions on exports of critical minerals.

The initiative represents a further development in a harder European approach towards Beijing. EU Today reported last week that China had warned it would respond if the EU introduced new restrictions against Chinese companies or products.

Macron and Merz are proposing two additional instruments.

The first would be intended to reduce European companies’ dependence on single suppliers for strategically important products and raw materials. The second would allow the EU to restrict access to its internal market when a third country uses political or economic measures that seriously undermine fair competition.

Under the proposal, the Commission could initiate countermeasures unless a qualified majority of EU governments voted to block them. That would reverse the normal political dynamic in which Brussels must first secure sufficient support before acting.

German officials have argued that the EU needs powers comparable in effect to the United States’ Section 301 trade measures or China’s ability to restrict exports of critical raw materials.

The Commission has welcomed the Franco-German intervention as a contribution to its work on economic security and global trade imbalances. Any new instrument would, however, require legislation and approval by both EU governments and the European Parliament before it could be used.

The proposal comes amid growing concern in both Paris and Berlin over the effect of subsidised Chinese production on European manufacturers.

Germany’s position is particularly significant. Berlin has traditionally been more cautious than Paris about measures that could restrict trade with China, reflecting the importance of the Chinese market to German carmakers, engineering companies and chemical producers.

That position has shifted as German industry faces increased competition from Chinese electric vehicles, machinery and other manufactured goods.

EU Today has previously examined the emerging Franco-German alignment on tougher China trade defences and demands from German manufacturers for broader European action rather than product-by-product investigations.

The new proposals go considerably further by seeking a mechanism capable of dealing with entire sectors and acting much more quickly than conventional anti-dumping proceedings.

Chemicals, PET plastics and hybrid vehicles are among sectors identified in the Franco-German document as areas where additional action may be required.

The timing is also significant. EU leaders are due to discuss trade relations with China at their summit in Brussels on 15–16 October, while Trade Commissioner Maroš Šefčovič is expected to hold talks with Chinese officials beforehand.

The Commission is already attempting to balance two objectives: maintaining Europe’s access to the Chinese market while reducing strategic dependencies that could be used as political leverage.

The Franco-German plan would give Brussels another instrument at the more coercive end of that policy. Its eventual importance will depend on whether governments agree to create it and how readily they would permit the Commission to use it against a major trading partner.

Washington is limiting the parts it licenses to the Commercial Aircraft Corp of China (Comac), the maker of the C919 passenger jet, triggering fears among Chinese pundits that it could ban the US-made engines the jet relies on. The Trump administration has been using China’s reliance on US aviation suppliers as leverage in trade talks, […]

The post For rare earth leverage, US caps aircraft parts licenses to China appeared first on Asia Times.

In the morning, when I get up, the first thing I see from my bedroom window is North Korea. I live in the heart of Berlin but my next-door neighbor is the embassy of the Democratic People’s Republic of Korea. In its huge facilities, inherited from when communist Germany (the GDR) existed, German law does not apply. The person who calls all the shots in there is a diplomat named Kim Chol Jun who, according to the German foreign ministry, does not hold the rank of ambassador.

Seguir leyendo

EU trade commissioner Maroš Šefčovič and Chinese commerce minister Wang Wentao are meeting in Beijing on Thursday (8 October) to discuss China’s growing trade surplus with the EU.

The surplus reached a record €360.6bn in 2025, up 15 percent from 2024, and widened another 10 percent in the first four months of this year.

The visit follows a meeting in Brussels in June, where Šefčovič said he wanted the dialogue to deliver tangible results by October, and the two sides set up working groups on trade balance, export controls, intellectual property and WTO reform. China has sent mixed signals, with Beijing reportedly showing openness to purchase agreements for European goods and possibly lower tariffs, while China’s commerce ministry insisted Brussels should not treat China as the source of the EU’s problems.

The EU put tariffs on Chinese electric cars in 2024, with extra duties ranging from 7.8 percent to 35.3 percent depending on the manufacturer. But hybrids weren’t covered, and Chinese hybrid exports to the EU jumped from 3,800 vehicles in October 2024 to roughly 50,000 in July 2026, adding to pressure on European carmakers already struggling to compete with Chinese manufacturers.

Šefčovič will also be hoping to secure assurances from his Chinese counterpart on access to rare earths and minerals for European companies, with a one-year moratorium on extra restrictions on rare earth and minerals exports from China – which also applies to the United States – due to expire in the coming weeks. In June, China assured Šefčovič that existing controls on rare earths and permanent magnets would not disrupt EU supply chains.

Meanwhile, there have been reports of some German companies stockpiling rare earths in case the Šefčovič-Wentao talks fail to break the deadlock and China imposes new export controls in retaliation for the EU’s ‘Made in Europe’ plan to protect its industrial supply chain.

If the Beijing talks fail, Germany and France could push for tougher measures at next week’s EU leaders’ summit, including a cap on Chinese hybrid-car exports, preference for European vehicles in public procurement and tighter limits on Chinese takeovers of European companies.

But China recently said it would “respond firmly” if the EU imposed restrictions on Chinese businesses or products.

Long-delayed accession reforms

In Strasbourg on Tuesday (6 October), the European Commission is expected to present its long-delayed pre-enlargement policy reviews to prepare the 27-nation bloc for the integration of candidate countries like Montenegro, Albania, Ukraine and Moldova.

EU capitals fear that enlargement could disrupt businesses and that new member states could use their veto to block decisions.

In response, the commission proposal is set to rely less on consensus and more on majority voting, including in sensitive areas such as security and defence, sanctions, human rights and enlargement itself – a change that could help speed up bids such as Ukraine’s.

Ironically, to get rid of unanimity in certain votes, von der Leyen’s proposal will need the unanimous approval of all 27 member states.

The text is also expected to set temporary limits on new members’ vetoes, longer safeguard periods, and cut the number of commissioners to two-thirds of the number of member states, with equal rotation.

Alongside the internal rules review, the commission is expected to unveil a revision of the standardisation regulation to fix gaps and increase transparency.

On Monday (5 October), EU chief diplomat Kaja Kallas will host Moldovan PM Vasile Tofan in Brussels for a regular meeting on the progress of the country’s association bid. 

The Eurogroup will also meet on Thursday in Luxembourg while EU financial ministers will meet on Friday.

Plenary week

In Strasbourg next week, MEPs are expected to condemn the results of the Russian State Duma election in which no party opposing Putin’s war on Ukraine was allowed to stand.

On Wednesday, they will debate priorities for the EU budget for 2028-2034 (the Multiannual Financial Framework – MFF) with signals of more money for Erasmus+.

And MEPs will vote on Tuesday on whether to inject €115m into a pilot programme to accelerate the development of military technologies called Agile. This comes as Putin escalates hybrid warfare against Europe.

Controversy is expected ahead of a vote to scrutinise the funding and political influence of Islamist groups in Europe. European Conservative and Reformists (ECR) have previously called for the Muslim Brotherhood to be considered terrorists.

Those feeling stressed in their jobs can look forward to mental health protections for workers if parliament votes to ask the commission to propose new rules for EU employers.

Portuguese prime minister Luís Montenegro will deliver a speech on Tuesday.

And a debate with Ursula von der Leyen and the Irish Council presidency will shape priorities for the EU summit later this month, 15-16 October.

Plenary talks will also address the migrant surge in the Spanish enclave of Ceuta this summer and how Europe should respond.

This article was updated

Germany and California parade as climate superpowers – yet both import energy, destroy industry and hand supply chains to Beijing. Western virtue, says Tilak Doshi, is made in Chinese coal-fired factories.

The post Beijing’s Useful Idiots: Germany, California and the Green Road to Chinese Supremacy appeared first on The Daily Sceptic.