EU Trade Commissioner Maroš Šefčovič and Chinese Commerce Minister Wang Wentao launched a new three-month trade and investment dialogue in Brussels on June 29, targeting tangible progress by an October ministerial meeting in Beijing [1, 2, 3, 4].
The talks establish a consultation mechanism with four working groups focused on trade and investment balancing, export controls, intellectual property rights, and World Trade Organization reforms [1, 2, 3, 4]. A joint monitoring mechanism will track trade flows and alert both sides to surges crossing defined "red zones," triggering political discussions [5, 1, 4].
The EU faces an annual trade deficit of €360 billion with China, described by officials as "China Shock 2.0," with a daily trade imbalance of approximately €1 billion according to Eurostat data from mid-June [1]. Šefčovič said, "We simply cannot afford to continue in the unsustainable growth of the trade deficit from the European perspective" and expects "dialogue would bring tangible results before the next meeting in Beijing in October" [1].
Chinese experts called the mechanism a pragmatic solution to allow both sides to "seek common ground" and "exchange space for time," a phrase meaning to create room to manage immediate tensions while awaiting more favorable conditions for deeper disagreement resolution [2]. China's government warned against EU trade restrictions and outlined plans to reduce dependence on Europe as part of its economic strategy [2, 3].
The agreed mechanism also aims to strengthen cooperation on rare earth exports and other critical materials within export control discussions [4]. Officials emphasized improving transparency, building trust, and managing trade frictions through technical exchanges and data sharing [4].
The talks follow weeks of heightened tensions over trade imbalances, market access, industrial overcapacity, and export restrictions [1, 2, 3, 4]. The EU and China will hold a ministerial-level review in October to assess progress and determine next steps [5, 1, 2, 3, 4].
