China Leverages EU Divisions to Increase Trade Surplus

The Government of China is utilizing divisions among European Union member states to expand its exports despite ongoing diplomatic friction with the bloc. China's trade surplus with the EU grew 24 percent year-on-year during the first half of 2026, following a 360 billion euro surplus in 2025. To maintain market access, Beijing is influencing European companies with Chinese operations and leveraging ties with non-EU nations, including the United Kingdom and Morocco, to enter the EU single market.

In June, EU Trade Commissioner Maroš Šefčovič and Chinese Commerce Minister Wang Wentao agreed to consultations regarding WTO reform, intellectual property, export controls, and trade balancing. Šefčovič has established an October deadline for these talks to yield tangible results as the EU seeks to prevent de-industrialization.

In exchange for progress on these issues, China is demanding the removal of Dutch export controls on ASML chip-manufacturing machines and a reduction in tariffs on Chinese electric vehicles. These developments follow a meeting in Beijing where President Xi Jinping hosted EU leaders to mark the 50th anniversary of bilateral relations.