Meanwhile, the European Union (EU) and China are increasing the pressure by intensifying their own trade talks. They confront immediate threats, like China’s industrial overcapacity and support of Russia in the current war in Ukraine. These conditions have led the EU to raise disputes that go beyond normal protectionism and deeply advance on the area of European industries. And with an 11th-hour high-level summit planned for July, negotiators from both sides are bracing for more talks this month.
Moreover, the EU has been particularly vocal about China’s industrial overcapacity. This overcapacity is creating a huge squeeze on all sectors in Europe. This overcapacity exacerbates the competitive disadvantage European manufacturers currently suffer, creating a serious concern for market fairness and trade imbalance. The EU’s apprehensions are rooted in the belief that China’s excess production undermines European industries, which are already navigating a complex global market.
While all of these economic issues are serious, perhaps of greater concern to EU leaders has been China’s support for Russia’s military aggression in Ukraine. The geopolitical implications of this support have increasingly polarized the bilateral relationship, making the trade discussions all the more difficult. Unlike the US, Europe is still reeling from the effects of the war. Most importantly, the EU understands that it must address both the economic and political challenges at the heart of its engagement with China.
While talks continue at this moment, analysts are still doubtful that major breakthroughs will be found in these talks. They note that past, underlying complexities, as well as systemic, national priorities and divides operate to make real progress difficult. The EU and China today face a hard reality characterized by clashing agendas and diverging visions, rendering agreement difficult to achieve.
In light of these difficulties, both parties have mutually decided to continue their negotiations later this month. That would be a game changer both for the EU and for China. They’re just as ready to meet each other in the middle and address the critically realistic circumstances that surround their predicament.
Looking forward, the high-level EU-China summit that is currently scheduled for July looks set to be key in determining how future relations will play out. For example, this summit should prioritize delivering strategically aligned policies on trade, industrial cooperation and supply chain resilience, and geopolitical stability. Both sides seem determined to keep communication flowing, but abyssal animosity remains just beneath the surface.