EU-China trade tensions escalate ahead of October deadline

7 min read

The EU and China are headed for a worsening trade confrontation as Brussels presses Beijing to rebalance relations before an October deadline that officials say is unlikely to yield major concessions. The EU trade deficit roughly doubled to €360 billion in 2025, prompting market-protection measures and anti-dumping probes that risk Chinese retaliation. China retains leverage through state subsidies, export-driven industry dynamics and dominance in rare earths, and a one-year rare earth truce with the US ends in October. Responses will test EU unity and could force slow, costly diversification of supply chains and industrial policy.

EU trade deficit with China reached €360 billion in 2025.