China and EU Push For Fresh Trade Talks In July

China and the European Union have scheduled urgent trade negotiations to address escalating economic disputes, with a high-level summit planned for late July 2025 in Beijing. The talks aim to resolve critical issues surrounding market access, rare earth exports, and electric vehicle tariffs, as both sides navigate the fallout from U.S. tariff threats. The urgency of these discussions underscores the need for a balanced trade relationship, but entrenched challenges and competing priorities may hinder swift progress.

Trade Deadlock and Tariff Tensions

On June 3, 2025, China’s Commerce Minister Wang Wentao and EU Trade Commissioner Maros Sefcovic met in Paris during a World Trade Organization event, agreeing to intensify efforts for the upcoming summit. The talks follow the EU’s decision to restrict Chinese medical device manufacturers from its procurement market, a response to China’s barriers to European firms. China, in turn, has imposed retaliatory measures, including tariffs on European brandy and dairy products, in reaction to the EU’s steep duties on Chinese electric vehicles. These tit-for-tat actions highlight a deepening rift, with both sides seeking leverage amid U.S. tariff pressures.

Rare Earths and Market Access Concerns

China’s April 2025 rare earth export controls, enacted in response to U.S. tariffs, have disrupted European firms’ operations, prompting accusations that Beijing is using these restrictions strategically. The EU’s new International Procurement Instrument, applied for the first time against Chinese medical device firms, aims to level the playing field for European companies facing restricted access to China’s government contracts. These measures reflect broader frustrations over unequal market access, a persistent issue in China-EU economic relations.

Summit Stakes and Strategic Priorities

The July summit, where European leaders will meet President Xi Jinping, is a critical opportunity to reset the relationship. China seeks relief from EU electric vehicle tariffs, while the EU demands fairer access to Chinese markets. However, both sides face distractions from U.S. trade policies, limiting their focus on bilateral solutions. Political inertia within EU institutions, coupled with a commitment to “de-risking” from China, complicates negotiations. Meanwhile, China’s rhetoric remains conciliatory, but tangible progress on issues like procurement and tariffs remains elusive.

The path forward hinges on whether China and the EU can align on practical outcomes before the summit. Without significant policy shifts, mutual grievances risk entrenching a cycle of retaliation. Both sides tend to prioritize actionable commitments over political posturing to foster stability in their economic partnership, especially as global trade dynamics grow increasingly volatile and uncertain.