Published on 6 September 2025 in Client Alerts

European Union seeks to reset trade relationship with China at the 25th EU-China Summit

On 24 July 2025, at a one-day summit in Beijing, European Union (“EU”) Commission President Ursula von der Leyen and European Council President Antonio Costa met with Chinese President Xi Jinping and Premier Li Qiang to seek to reset the EU-China trade relationship.  The summit marked the 50^th anniversary of the establishment of EU-China diplomatic ties.

President von der Leyen highlighted a growing imbalance in trade, noting the EU’s significant trade deficit with China, which had doubled in the last nine years to EUR 305.8 billion.  President von der Leyen also stated that China’s relationship with Russia was now a “determining factor” in its ties with the EU.  President von der Leyen raised concerns with China over overcapacity within its economy, including in the steel, solar, electrical vehicle and battery sectors, as well as concerns over export controls on rare earth and permanent magnets from China, disrupting European automotive production.  

President Xi, in turn, emphasised the importance of “mutual trust”, urged the EU to “properly manage differences” and affirmed that the challenges facing Europe did not come from China.  China rejected concerns over Chinese oversupply as a pretext for protectionism.  For China, citing the International Energy Agency’s prediction of significant supply shortages by 2030, its energy capacity should be seen as a contribution, not “excess”, with the capacity to bridge the climate transition “green gap”.

The summit came shortly after the EU followed the lead of the United States in imposing tariffs on Chinese electric vehicles, leading to retaliatory duties from Beijing on European liquor.  This was followed by reciprocal restrictions and limitations placed on medical equipment.  In the lead-up, China’s Foreign Ministry indicated that the bilateral relationship was at a “critical juncture of building on past achievements and opening up a new chapter.” 

At the summit, the EU and China also issued a joint statement on climate change, committing “to demonstrate leadership together to drive a global just transition”; upholding the central role of the UN Framework Convention on Climate Change and the Paris Agreement; and to enhance cooperation on energy transition, adaptation, methane emissions management and control, carbon markets and green and low-carbon technologies.

Speaking afterwards, President von der Leyen emphasised, “Europe and China are two of the world’s three largest economic and trading powers. This makes our relationship one of the most consequential of the 21st century.”  China’s Foreign Ministry affirmed its willingness to “to import more quality products from the EU that meet China’s market demand”, as well as its “hope [that] the EU will ease restrictions on high-tech exports to China.” 

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