Editor's note: Wang Xiaolei is an assistant researcher at the Institute of State System and School of Economics of Zhejiang University. The article reflects the author's views and not necessarily those of CGTN.

On October 15, 2026, leaders of the EU's 27 member states met in Brussels for a summit, where trade imbalances with China dominated the agenda. The draft summit conclusions show that leaders called on the European Commission to maintain dialogue with Beijing while making full use of existing trade defence instruments and developing new tools. This reflects the EU leaders' "two-track" approach toward China: pushing ahead with intensive consultations while tightening restrictions, including deploying the Anti-Coercion Instrument.

Europe's challenges fall into two categories: Political divisions and economic hardships

One challenge lies in internal divisions. The twenty-seven EU member states feature divergent economic structures, which shape their contrasting views on trade with China. Nations with robust export sectors and substantial commercial interests in China have incentives to avert trade conflicts. By contrast, countries exposed to fierce competition in specific industries demand stronger protective measures. A joint summit statement cannot erase such divergences. Member states' stances may also shift rapidly. For instance, Germany voted against EU tariffs on Chinese electric vehicles back in 2024. This month, after years of industrial job losses at home, it has aligned with France to advocate for new instruments that limit access to the EU market. Spain, meanwhile, maintains that trade frictions with China ought to be resolved via negotiations.

Another challenge is economic hardships. The EU's consideration of deploying trade instruments targeting China is closely linked to internal economic hardships across EU member states, including surging energy prices and mass unemployment. On the one hand, since the outbreak of the Middle East conflict in late February, energy prices across Europe have surged, and elevated energy costs have pushed up industrial operating expenses, eroded household purchasing power and dampened economic growth. On the other hand, industrial employment in Germany, Europe's largest economy, has been on a downward trajectory for years. As a result, economic anxiety among EU citizens has intensified, which prompts national governments to show voters they are acting — including through trade restrictions on Chinese imports.

However, such measures fail to address the root causes. Europe's competitiveness hinges on energy prices, investment, innovation and regulation. The summit's own conclusions call for lower energy prices, reduced administrative burdens and greater investment. These are responsibilities for European national governments. Trade restrictions would push up costs for European firms relying on Chinese components and materials, as well as for consumers. They would also spark fresh disagreements among member states, whose trade linkages with China vary widely. Protectionism may deliver short-term political gains, yet it cannot boost industrial competitiveness.

China upholds the shared interests of the two sides

China's position remains consistent. It regards the EU as a partner, not a rival. Bilateral trade is mutually beneficial, driven primarily by market competition and each side's economic strengths, and interdependence poses no inherent risk. China rejects protectionism and the politicisation and securitisation of trade and economic issues. It contends that frictions should be addressed via dialogue and consultation under WTO rules, with both sides respecting one another’s concerns.

China has acted in line with this position. During the consultations held in Beijing on October 8 and 9, the two sides reached an understanding on hybrid vehicles, grounded in WTO rules, respect for facts and the principle of non-discrimination. European Commission President Ursula von der Leyen noted that the talks had yielded initial outcomes. China has also made it clear that mixing dialogue with pressure erodes mutual trust. Following the EU summit, China's Ministry of Commerce stated that the EU cannot expect to secure gains through pressure, and should not underestimate China’s resolve and capacity to safeguard its interests.

The EU harbours concerns over the scale of its trade deficit with China. For China, such imbalances ought to be viewed holistically and through a long-term lens. Chinese officials have noted that the EU cannot lament the trade deficit while maintaining restrictions on high-tech exports to China, and that China's expanding domestic market opens up greater opportunities for European firms. As Commerce Minister Wang Wentao stated to the EU delegation during the Beijing consultations, China is not the source of Europe's challenges, but a partner in solving them.

Overall, Europe's internal divisions and economic hardships are genuine, and they demand homegrown solutions. New restrictive measures targeting China will not bring down energy costs, resolve budget disputes, or bridge divergences among member states. Crafting such tools while dialogue remains underway will complicate ongoing negotiations. Europe's sounder option is to sustain dialogue building on existing consensus, and address the root causes of its economic woes domestically.