BRUSSELS — Slovakia is reviving a dormant cooperation forum with Moscow, putting Russia’s gas and oil supplies, nuclear fuel and the treatment of Russian athletes high on the agenda of their first such meeting in five years, according to a Russian government note obtained by POLITICO.

The note, written by Russian Science and Higher Education Minister Valery Falkov, says Slovak Foreign Minister Juraj Blanár agreed during an Aug. 20 video call to hold a meeting of the Russian-Slovak Intergovernmental Commission in Moscow.

Slovakia’s Prime Minister Robert Fico said Wednesday the meeting is scheduled for Nov. 25. The Russian note — which is dated Sept. 10 — initially set the date of the meeting as Oct. 26-27.

The IGC, which covers economic, scientific and technical cooperation, has been dormant since Russia’s full-scale invasion of Ukraine in February 2022. The last meeting was the commission’s 21st session, held in Bratislava on Nov. 12, 2021.

The meeting comes as Moscow finds openings in other international arenas. The U.S. has invited Vladimir Putin to December’s G20 summit in Miami, while the International Olympic Committee has provisionally lifted its suspension of the Russian Olympic Committee and urged sports bodies to ease restrictions on Russian athletes.

Asked about the purported agenda for the IGC, the Slovak foreign ministry directed POLITICO to Blanár’s public statements after the Aug. 20 call. “We pursue a policy in all directions and maintain dialogue with all countries that are interested in pragmatic cooperation with us for the benefit of the Slovak Republic’s national interests,” Blanár said at the time.

The Russian foreign ministry did not respond to a request for comment.

The renewed push for warmer Slovak-Russian relations follows Fico’s May 9 visit to Moscow, where he met Russia’s President Vladimir Putin during Victory Day commemorations. It comes after Viktor Orbán’s defeat in Hungary’s April election, which cost Putin one of his closest partners in Europe and forced him to look elsewhere for EU allies.

Months before losing the election to Péter Magyar, Orbán rebooted the Russian-Hungarian Intergovernmental Commission on Economic Cooperation, which had been suspended for several years after the 2022 invasion. Magyar’s government did not confirm to POLITICO whether the commission would go ahead next year.

EU leaders, including Fico, will gather in Brussels on Thursday for a two-day summit focused on issues including energy prices and support for Ukraine, with the country’s President Volodymyr Zelenskyy expected to join them for a conversation on Friday.

Oil imports and cultural integration

In the August video call, Blanár raised Slovakia’s opposition to the EU’s phaseout of Russian gas imports and asked to discuss supplies at the Moscow meeting, according to the document, which POLITICO could not independently verify but bears the hallmarks of a legitimate Russian ministerial note. Slovak representatives also stressed the importance of continued Russian oil deliveries through the Druzhba pipeline and welcomed regular shipments of nuclear fuel for Slovak power plants, according to the note.

Slovakia remains heavily reliant on Russian oil and gas, and Fico has argued that ending imports would raise costs. When the two leaders met in Moscow on May 9, Putin said Russia would do everything to meet Slovakia’s energy needs.  

The agenda for the meeting next month reaches beyond energy, according to the document. The sides plan to explore working groups on culture, tourism, agriculture and environmental protection, and to discuss the status of the Russian Center for Science and Culture in Bratislava.

Falkov also records Blanár’s opposition to what the note calls the “discrimination against Russian athletes” at international competitions, noting the issue is to be discussed at the IGC meeting.

The International Olympic Committee lifted the suspension of the Russian Olympic Committee in July and said its previous recommendations restricting Russian athletes’ participation no longer applied. World Archery lifted restrictions on Russian athletes and officials in August. FIFA President Gianni Infantino has also called for Russia to be allowed back into international football.

The approach echoes Moscow’s recent effort to lock in closer ties with Orbán’s Hungary. Budapest and Moscow in December agreed on a 12-point plan to expand cooperation in areas including energy, trade and culture. The plan was signed by then Hungarian Foreign Minister Péter Szijjártó and Russian Health Minister Mikhail Murashko after talks in Moscow in December. The Slovak note points to a similar breadth of ambition.

The Kremlin’s outreach to Fico shows how Moscow can use energy ties to pull individual EU countries away from a united stance on Ukraine. Putin made a similar pitch in Washington last weekend: After a call with the Russian leader, President Donald Trump said Russia would supply diesel to U.S. and global markets to bring down fuel prices. The deal would provide revenue to Moscow while weakening efforts to maintain a united front against the Kremlin.

But there are questions over whether Putin can follow through on his pledge to Trump. Ukraine has been stepping up drone strikes on Russian refineries, aiming to disrupt fuel supplies and cut revenue for Moscow’s war effort. Kyiv said this month that strikes had disabled 51 percent of Russia’s oil-refining capacity.

When Maroš Šefčovič set out his strategy for engaging with China to European Union ambassadors in July, he had a warning for governments urging tougher action on trade against Beijing.

“Sometimes, it’s even popular to start a trade war, but it’s very difficult to finish it,” the EU trade chief recalled later in an interview with POLITICO.

Three months on, Šefčovič has secured a first breakthrough, reaching a deal in Beijing last week to sharply reduce imports of Chinese hybrid cars. The symbolic win marks a small step toward stabilizing a trading relationship that Brussels believes has reached a dangerous tipping point.

The agreement, which will initially cap imports at 350,000 vehicles a year, marks a significant concession from Beijing, whose carmakers have been flooding the European market with increasingly competitive vehicles. 

For Šefčovič, who negotiated last year’s tariff truce with Donald Trump, the agreement suggests his strategy of engagement backed by the threat of tougher trade measures may be starting to pay off.

Šefčovič agreed to launch the trade dialogue at a meeting with Chinese Commerce Minister Wang Wentao in Brussels in late June.

By focusing initially on cars — an area where the EU has leverage as one of the few major markets still open to Chinese manufacturers — the Slovak commissioner hoped to secure a confidence-building win before tackling thornier questions, from critical raw materials to China’s vast industrial overcapacity.

At the same time, he worked to coalesce European governments behind a parallel effort to strengthen the bloc’s trade defenses, reinforcing his negotiating position with the threat of tougher action to bring down the EU’s €1 billion-a-day trade deficit with China.

The hybrid deal, however, is only the opening move in a much bigger contest.

EU leaders meet in Brussels on Thursday to take stock, weighing the benefits of continued engagement against demands for more aggressive action to protect European industry from a surge in Chinese imports.

The meeting will test whether a commissioner who has made a career of finding compromises with difficult partners can maintain Europe’s support for a strategy whose success is far from assured.

“You have to deal with the same partner across the table,” Šefčovič said of the risks of starting a trade war, in the interview with POLITICO in August. “So if you can avoid this, it would be much better.”

Market power

Šefčovič’s opening move was to focus on an area where Europe still has leverage: access to its market of 450 million people.

China’s fiercely competitive manufacturers have become global powerhouses, but they are struggling with weak demand at home. A prolonged property slump has weighed on consumer spending, while cutthroat competition has triggered price wars. Domestic sales of passenger vehicles fell 28% in September from a year earlier.

That makes overseas markets increasingly important. With the U.S. shutting out Chinese imports, Europe remains one of the most lucrative markets still open to Chinese manufacturers.

Šefčovič gambled that Beijing would prefer to accept limits on exports rather than risk losing access to the European market altogether.

He set his sights on the automotive sector, where Chinese manufacturers have been making rapid inroads. Chinese carmakers accounted for just 2% of both the European hybrid and plug-in hybrid markets in 2024; by the first half of 2026, their respective shares had risen to 14% and 25%, industry figures show.

The Commission was preparing to restrict hybrid imports even without an agreement. But a negotiated settlement also offered Šefčovič something valuable politically: evidence that engagement with Beijing could deliver tangible results.

The negotiations were intense, according to a person familiar with the talks on the Chinese side.

“It was very, very tough,” the person said, speaking on condition of anonymity to discuss the closed-door negotiations. “Both sides hadn’t seen such intensity in a long time. No summer break, no holidays. They worked around the clock even one, two days prior to Šefčovič’s trip to Beijing.”

While pursuing dialogue, Brussels also wanted to convince Beijing that it was prepared to take tougher action if the negotiations failed.

Šefčovič had earlier flagged plans for a new “diversification instrument” that would require businesses in critical sectors to source essential inputs from at least three suppliers — a move to reduce China’s ability to exploit Europe’s dependence on its critical raw materials.

Then, just three days before Šefčovič’s trip to Beijing, France and Germany raised the stakes.

President Emmanuel Macron and German Chancellor Friedrich Merz called for a powerful new trade weapon that would allow Brussels to restrict — or even shut off — access to the European market within days for countries deemed to have severely distorted the bloc’s single market.

The proposal did not explicitly name China, but Beijing was its obvious target. 

Keeping it together

EU leaders are expected to welcome the agreement but also press the Commission to act quickly to strengthen the bloc’s trade defenses, according to several diplomats. The understanding reached in Beijing has bought time, but hasn’t settled how far Brussels should go if Chinese exports keep rising or negotiations stall.

“We’re losing thousands of jobs in industry; olive oil and ice cream won’t solve the core issue,” said one EU diplomat after Šefčovič briefed ambassadors on Sunday, referring to reported deliverables from the talks.

A senior German official welcomed the Beijing deal as a first step in the right direction. “It’s a positive sign — which, of course, doesn’t fully solve the problem of the trade deficit with China,” the official said.

But Berlin’s support for a tougher line might prove short-lived.

Alicia García-Herrero, a senior fellow at the Bruegel think tank, argued that Beijing’s concessions had been calculated to assuage Berlin, given the importance of the automotive industry to the German economy.

“I’m just hoping Merz doesn’t turn away from the letter he sent to the Commission,” she said. With the German chancellor politically weakened at home, García-Herrero fears he may be reluctant to risk a prolonged confrontation: “I worry Merz will take this quick win and run.”

That leaves Šefčovič facing a balancing act: keeping EU governments on board with continued engagement with China while maintaining a credible threat of tougher action if the talks break down. 

“I expect [leaders] to give the Commission a nod to move ahead with other trade defense measures. China may see this as a betrayal. If that is the case, we could return to conflict very quickly,” said Noah Barkin, a senior adviser at the Rhodium Group’s China practice.

The battle ahead

For Šefčovič, the challenge now is to turn a limited breakthrough on cars into a broader rebalancing of trade with China — while buying Europe time to strengthen its defenses should the negotiations fail.

“There is an argument for doing to China what China had done to Europe for years — bogging Beijing down in dialogue and process while Europe gets its tools in place. But the EU needs to make full use of the time that these talks provide,” said Rhodium’s Barkin. 

The trade chief is expected to hold a video call with Wang in January, before the two meet again next March. Those talks will test whether Beijing is prepared to make further concessions in sectors where European industry is increasingly on the defensive, including chemicals.

Another priority is critical raw materials, where China has agreed to continue issuing export licenses for rare earths. Beijing’s grip on their supply gives it considerable leverage over European manufacturers, underscoring the limits of Šefčovič’s negotiating position.

The Commission is also preparing two proposals for December: the diversification instrument, aimed at reducing dependence on Chinese supplies, and a mechanism to shield European industries and regions from retaliation.

The scale of the challenge is daunting. Chinese hybrid imports were worth €6.7 billion in the first half of 2026, against an EU-China trade deficit of €360 billion last year. The agreement offers some relief to European automakers but does little to address the underlying imbalance.

Brussels hopes the hybrid safeguard can serve as a blueprint for protecting other industries facing a surge in Chinese imports.

“We hear our industry. That includes the chemical industry, the wind industry, the furniture industry. We know where there’s a surge, and we know what hits the hardest in terms of our deindustrialization,” a senior Commission official said on Monday.

Šefčovič acknowledged the limits of dialogue in his August interview, warning that negotiations would become harder to sustain without tangible progress.

“What would be very important is to come back to say there is acknowledgment of the issue and there are already some pilot schemes which we want to test and to see if they are working,” he said.

“But if simply there will be no action, then of course it will be much more difficult for us just to talk about these issues.”

Jordyn Dahl in Brussels and Hans von der Burchard in Berlin contributed reporting. 

European governments rebuked U.S. President Donald Trump’s plan to import hundreds of thousands of tons of Russian diesel, and vowed to keep isolating Moscow and supporting Ukraine as it heads into a brutal wartime winter.

Trump said over the weekend he would import 300,000 tons of Russian diesel, weeks ahead of U.S. midterm elections in which the Republicans are polling badly and in which energy prices and cost-of-living concerns are expected to play a major role.

But his announcement — which included a claim that Russia and Ukraine had agreed an “energy ceasefire” and a call for Ukrainian President Volodymyr Zelenskyy to step down — drew skepticism and scorn from European capitals and the EU.

“This deal doesn’t help neither the price of oil products nor the unity of the transatlantic community,” Lithuanian Foreign Minister Kęstutis Budrys said at a gathering of the bloc’s foreign ministers on Monday morning, adding “it is not the European way.”

Irish Foreign Minister Helen McEntee called Trump’s announcement of a deal with Moscow “concerning,” while German Minister of State for Europe Gunther Krichbaum said every dollar spent on Russian energy funded the purchase of weapons used against Kyiv.

The EU’s top diplomat, Kaja Kallas, reminded Washington that “Russia has started this war. We should not forget this.”

On Monday, Zelenskyy suggested that Washington had other motives for pursuing an energy agreement with Moscow, arguing that the Russian fuel involved would make little difference to global supplies.

Speaking at the Warsaw Security Forum, Zelenskyy said proposed Russian diesel deliveries were insignificant compared with global monthly consumption of roughly 120 million tons.

“I don’t think that this will have a tangible impact,” Zelenskyy said. “I believe that there are different rationales behind this decision.”

Zelenskyy also suggested Washington should consider an alternative arrangement with Kyiv. “Why doesn’t America then conclude a diesel deal with Ukraine?” he asked. “Let’s propose a diesel deal with Ukraine.”

He also revealed that Kyiv had not been informed beforehand of Trump’s announcement that he had secured an energy ceasefire. “No, we did not know about that,” Zelenskyy said. “We’ve learned that from the media as well.”

On their way into their meeting, the EU’s foreign ministers remained united in their insistence that increasing pressure on Moscow was the only way forward.

“Obviously our position has not changed — pressure on Russia, sanctions, support to Ukraine, Russia’s isolation is the way to peace,” Latvian Foreign Minister Baiba Braže said.

The British Foreign Office’s minister of state Stephen Doughty said London was “not planning to follow suit with” purchasing Russian energy and would ratchet up “economic pressure” on Moscow.

“Pressure, pressure, pressure on Russia,” Lithuania’s Budrys said.

What ceasefire?

Trump’s claim that Ukraine and Russia had agreed to an “energy ceasefire” drew confusion from Kyiv and its allies over the weekend, with Zelenskyy saying the truce and its terms were “news” to him but that he would support it nonetheless — provided Moscow followed suit.

Just hours after Trump’s announcement, however, Russian bombs fell on Ukrainian power plants, causing widespread blackouts.

Kyiv is bracing for its fifth winter since Russia launched its full-scale invasion in February 2022, which Polish Prime Minister Donald Tusk said last month could prove “tragically critical” for Ukraine due to Russia’s near-constant strikes on infrastructure.

At the opening session of the Warsaw Security Forum on Monday, Tusk slammed “anyone who is trying to introduce any symmetries, who suggests it is Ukraine responsible for the war,” saying doing so “gives a valuable present, gift, to the aggressor, to Putin.”

Kallas said any ceasefire shouldn’t “only apply to the refineries, where Ukraine has one and Russia has plenty,” adding that would “definitely [be] in the benefit of the Russians.”

She also called on Washington to join Brussels and London in imposing harsh sanctions on Russia. “Of course the U.S. is our biggest ally,” she said, “but our message is clear: If we want to end this war, the only way we can do this is putting more pressure on Russia.”

Ukraine’s financial needs are set to come up at a meeting of European heads of state and government on Thursday in Brussels. The IMF estimated that Kyiv will face a financing gap of $30 billion to $35 billion next year.

“Ukraine will be front and center at this week’s European Council,” European Commission President Ursula von der Leyen said in a statement Sunday night after a phone call with Zelenskyy, adding the war was entering a “new, grimmer phase.”

Zoya Sheftalovich contributed reporting from Brussels. Nick Vinocur contributed reporting from Warsaw.

BRUSSELS — Three of the European Parliament’s biggest political groups say they will fight an EU proposal to relax carbon pricing rules, opening a rift that could push conservative lawmakers to side with the far right to weaken the bloc’s climate ambition.

The center-left Socialists and Democrats, the centrist Renew Europe and the Greens all said in recent days that they would try to preserve an ambitious path to net zero under the Emissions Trading System, forcing heavy industry to cut planet-warming emissions faster than Brussels proposes.

That puts them at odds with the center-right European People’s Party, Parliament’s biggest group, which broadly supports the European Commission’s proposal.

For years, those four groups have worked together in Parliament to pass legislation that strikes a political middle ground, shunning collaboration with the far right. The sometimes uneasy alliance has ensured consistent, bipartisan support for the ETS, Europe’s most powerful tool for reducing greenhouse gas emissions.

But now, a reform of the landmark cap-and-trade scheme, unveiled by the EU executive in July, looks set to become a bellwether in an era when, increasingly, the center no longer holds.

The EPP is steering Parliament’s work on the proposed ETS revision through veteran German lawmaker Peter Liese, who wants to find a deal that satisfies everyone.

“I don’t want the Venezuelan majority. It’s against my convictions, but it is also not possible because nobody would see [Marine] Le Pen, the Austrian far-right FPÖ or the German extreme-far-right AfD voting for any ETS proposal,” he told POLITICO in September, using the informal term for a controversial alliance of center-right and far-right groups.

Instead, Liese, who maintains close ties with Dutch S&D lawmaker Mohammed Chahim, said he wanted “the broadest possible coalition,” including the right-wing European Conservatives and Reformists as well as “the Greens, The Left, if they want.”

But new amendments filed last week by the S&D, the second-largest group in Parliament, as well as the Greens and Renew, point to major schisms over key aspects of the ETS reform. The biggest divide concerns the so-called linear reduction factor, the mechanism that determines how quickly the supply of pollution permits shrinks each year. 

Under the current trajectory, the total cap on carbon emissions for all sectors covered by the ETS falls slightly each year, and would reach zero around 2039 or 2040. At that point, ETS sectors — which include power generators, steelmakers and chemical manufacturers — would no longer be able to emit any carbon dioxide at all. 

Liese’s proposal would push that date into the 2040s, in line with the Commission’s original pitch in the summer. But the three other centrist or left-leaning groups oppose the plan and have tabled nearly identical amendments that would keep the rates high until the end of next decade and bring about quicker industrial decarbonization across Europe. 

Though the percentages between the warring groups appear tiny, they translate into millions of additional tons of CO₂ emissions and expose a growing political gulf. S&D, the Greens and Renew are fighting to preserve Europe’s climate ambitions, while the EPP is increasingly sympathetic to the concerns of the chemicals and metals industries, both of which have been vocally critical of the ETS. 

But just as the chances for a centrist compromise dim, Liese has another possible route.

Memories of fascism in the early twentieth century once discouraged mainstream political groups from working with the far right. That firewall appeared to erode when talks with centrist allies collapsed in 2025 over the first omnibus package governing certain environmental reporting rules. The EPP turned to the right-wing ECR and the far-right Patriots for Europe and Europe of Sovereign Nations to secure a deal, paving the way for similar alliances in the future.

On the ETS, there is a growing risk that it could happen all over again.

Czech lawmaker Alexandr Vondra of the ECR recently floated the possibility of working with Liese to secure a deal backed by his right-wing group during a parliamentary debate on the ETS.

“I would address here specifically EPP because it holds the key to the success of the reform of the ETS system,” he said, before laying out a list of industry-friendly demands that included a much looser trajectory to zero emissions. “If so, count me and my group in.”

Amendments tabled by Vondra this week and seen by POLITICO reflected a similar willingness to work with the EPP and limited regard for emissions reductions. If Liese does decide to shift his compromise to the right and cashes in on ECR votes, it could also quell problems within his own party.

The Polish, Spanish and Italian branches of the EPP are all unhappy with what they see as Liese’s overly climate-friendly proposal, according to three parliamentary insiders. Recent votes in Parliament on the Carbon Border Adjustment Mechanism, the bloc’s carbon levy on imports that works in tandem with the ETS, exposed fractures within the group, with portions of the EPP supporting right-wing groups or abstaining on a key provision of the legislation.

But how willing far-right groups will be to play ball with the EPP remains to be seen. 

The Europe of Sovereign Nations group — whose members include Germany’s far-right Alternative für Deutschland — is hostile to the ETS and wants it totally abolished. But the Patriots — whose members include France’s National Rally — might provide Liese with an opening: the group generally calls for the policy to be slowed to a halt, especially the upcoming ETS2, as it does all Green Deal legislation. French far-right lawmaker and rising political star Jordan Bardella said as much in a speech to Parliament in May.

“ETS: three letters, an acronym that reeks of detached bureaucracy, with one question that keeps coming up: who’s going to pay?” he said.

BRUSSELS — The EU is facing a winter gas shortage that could leave it scrambling to replace lost energy supplies equivalent to the power used by 12 million homes, according to new reports shared with POLITICO.

The shortfall raises the prospect of a winter of soaring power bills and forced energy saving measures if the bloc fails to find adequate supplies elsewhere.

As the war in Iran continues to disrupt global energy supplies, the EU faces an overall shortfall this winter of up to 14 billion cubic meters of natural gas — around 7% of the bloc’s demand and enough to power between 10 and 12 million European households, according to a report by the Institution for Energy Economics and Financial Analysis, a U.S.-based energy think tank.

Those conclusions are echoed in a key report by a top European body of gas network operators that was presented to national energy officials on Thursday.

Natural gas is used widely to heat Europe’s buildings, power its industry and generate its electricity. But the EU’s gas reserves have fallen to their lowest level for the time of year since records began in 2011, at just above 70%, after high prices made it more attractive for traders to sell gas in the summer rather than store it for later use in the winter.

With gas prices at near-four-year highs and supply constrained due to the U.S.-Israeli war in the Middle East, Europe has limited supply options if the coming winter proves as cold as the last, IEEFA found.

While that doesn’t necessarily mean the bloc will run out of gas, it does mean there could be 7 billion fewer cubic meters of stored gas to draw upon. That could force countries to buy gas at high prices on increasingly volatile global markets, or even require consumers to cut demand if fresh supplies are unavailable.

The EU’s record-low reserves leave the bloc “with less of a buffer” against global supply disruptions, leaving it “vulnerable to price spikes,” Ana Jaller-Makarewicz, IEEFA’s lead European energy analyst, said in a statement. If countries are forced to exhaust stocks this year, that would also leave them with more to refill next year, continuing the feedback loop of low reserves and higher prices, she added.

The same risks were outlined in a 2026-2027 winter supply outlook published Thursday by the European Network of Transmission System Operators for Gas (ENTSO-G), an association of gas operators. The report warns that if imports of liquefied natural gas are limited or even “optimal” in the context of a cold winter, storage levels could fall as low as 11%, a baseline needed for strategic reserves that can’t be easily tapped into.

If countries hope to restore their reserves to 30% by the end of winter — or else face increased exposure to future cold spells — volumes equivalent to 7% of the demand will either have to be curtailed or simply withheld from consumers, ENTSO-G warns.

Part of that pressure comes from a looming EU-wide ban on long-term supply contracts for Russian LNG, due to take effect in January, which will reduce European gas imports by an additional 7 billion cubic meters, according to the IEEFA report. Russian gas has been historically used to offset “swings in demand” over the winter, it said. “Now Europe depends on storage to get through winter.”

To make matters worse, the IEEFA report argues, gas demand over winter has crept up in the past two years, while imports to the bloc have flatlined. That’s left the EU leaning harder on its reserves over the winter period, with net drawdowns rising to 22.6 billion cubic meters in January this year, up from 18.8 billion cubic meters in January 2025 and 17.8 billion cubic meters in January 2024.

The alternative would be to import fresh LNG, a seaborne fuel that the EU increasingly sources from the U.S. But at current prices, importing the lost volumes would cost Europeans an additional €3 billion, a 12% rise over what the same volume would have cost last year, on top of already sky-high prices, according to the report. U.S. LNG production is also near full capacity, meaning those additional imports would further squeeze supply, Jaller-Makarewicz told POLITICO.

To some, a rise in prices is more likely. While ENTSO-G’s tight market scenario assumes a “global deficit” that sees available LNG imports into Europe reduced by 20%, Laurent Ruseckas, a senior gas market analyst at S&P Global Energy, argues that reserves can only ever fall so low, “since a rapid drawdown early in winter will drive up prices,” drawing cargoes to Europe from Asia.

“There is not much demand to destroy in Europe,” he added, pointing out that the war in Ukraine already destroyed 20% of the bloc’s industrial demand. “And it didn’t come back.”

LONDON — Germany wants the U.K. to raise tariffs on Chinese electric vehicles in exchange for protection from Made in Europe rules, according to a person familiar with Berlin’s position.

Friedrich Merz’s government believes the move would show reciprocity on trade and counter accusations from other EU member states that Britain is trying to “cherry pick” the benefits of EU membership, said the person, who was granted anonymity to discuss closed-door talks.

It comes as Prime Minister Andy Burnham met with the German chancellor on his first official visit to the country this week.

Burnham and Merz were due to talk about possibilities for Britain’s future relationship with the EU — after the British prime minister put rejoining the bloc back on the table of U.K. politics for the first time in a decade.

Berlin’s position on EV tariffs is significant as Germany has broadly backed a tolerant policy towards the U.K. on trade matters since Brexit — in contrast to more hard-line positions taken by countries like France.

The EU is in the process of drawing up new Made in Europe rules that would favor European producers over those outside the bloc — in response to trade practices by competitors like China and the United States.

The U.K. is worried that the measures will hit British business — especially automakers — and wants assurances from Brussels that it will get an opt out. If Berlin gets its way, those assurances could be dependent on emulating EU trade policy with regard to Chinese EVs.

Predatory strategy

Germany’s vaunted car industry, arguably the jewel in the country’s economic crown, has faced stiff competition from Chinese imports in recent years.

EU countries have accused China of dumping low-cost, state-subsidized electric vehicles into the European market and in December 2024 imposed countervailing duties as high as 35.3. percent on some manufacturers.

Industry Commissioner Stephane Séjourné accused China of pursuing a deliberate “predatory strategy” with state subsidies to the tune of €10,000 per vehicle.

The U.K.’s Trade Secretary Jonathan Reynolds told POLITICO last month that the government was keeping tariffs “under review, to be frank, more closely than lots of other issues” and that “different parts of our own sector want different things from” the government’s policy.

Hamish Falconer, the U.K.’s minister for European relations, told POLITICO’s Brussels Playbook Podcast this week that he was “surprised” at reports tariffs might be a condition of Made in Europe opt-outs, adding: “That’s not the kind of conversation that I’m having with my European counterparts.”

Going ahead with higher tariffs risks alienating Beijing, which has expressed serious concerns about the policy. It would also raise the price of electric vehicles on the market, potentially making it harder for the government to meet its decarbonization targets.

BRUSSELS — European Trade Commissioner Maroš Šefčovič opened two days of talks in Beijing on Thursday aimed at rebalancing a gaping trade deficit, with failure to reach a deal likely to test Brussels’ resolve to impose tougher trade restrictions.

The meeting marks the final round of an effort launched in June to reset the lopsided trading relationship, and will hinge on whether China’s Commerce Minister Wang Wentao is prepared to make substantial concessions.

If no agreement can be reached to narrow the EU’s €1 billion-a-day goods trade deficit, Brussels and Beijing could find themselves on a collision course. EU leaders will review the outcome of the talks at a summit in Brussels next Thursday, where they will consider next steps.

Arriving in China, Šefčovič said his goal was to balance what he called an unsustainable trade deficit. Heading into a meeting with Wang, he said it was crucial that the talks deliver “tangible outcomes.”

The discussions have zeroed in on cars, with Chinese exports increasingly eating into the market share of European automakers. In August, one in eight cars bought in the bloc was Chinese, thanks largely to a boom in sales of plug-in hybrid electric vehicles.

European negotiators have been pushing China to commit to some form of export restraint — in particular for hybrids. Unlike Chinese-made battery-electric vehicles, which were hit with extra countervailing duties in 2024, plug-in hybrids are not subject to such measures.

Without meaningful commitments from Beijing, the Commission has warned it will resort to unilateral trade restrictions. For cars, it is considering safeguard measures that would mix import quotas and tariffs to protect European automakers.

Chemicals are next. Industry Commissioner Stéphane Séjourné said Thursday that the Commission plans to introduce targeted safeguards on plastics and composite materials, subject to a request from EU governments that Brussels do so.

Wind in his sails 

Šefčovič flew to Beijing with the backing of the leaders of Europe’s two biggest economies — France and Germany — to take a tougher approach to trade.

In a joint appeal on Monday, President Emmanuel Macron and Chancellor Friedrich Merz said the Commission should be given a freer hand to shut off access to the EU for goods from countries that distort the bloc’s single market.

While the two leaders did not mention China in their letter to Commission President Ursula von der Leyen, there was no mistaking the target of their proposed trade “kill switch,” which could be blocked only by a qualified majority of EU countries.

The EU already has a powerful trade weapon in its Anti-Coercion Instrument, designed to counter economic bullying by foreign powers. 

But Brussels has yet to muster broad support from member countries to deploy it, most recently in January when U.S. President Donald Trump threatened to seize Greenland, a Danish territory.

The EU’s difficulty in responding swiftly to trade threats has heightened concerns about a surge in Chinese exports that European officials say benefit from unfair government subsidies. With Trump hiking U.S. tariffs, ever more Chinese exports are heading to Europe — increasing pressure on industries that are already being forced to retrench.

Europe’s heavy dependence on China for processed rare earths and other critical raw materials also leaves it vulnerable to retaliation should relations deteriorate.

“If we aren’t willing to fix the way our model works, then we’ll be destroyed,” said one EU diplomat, summing up the concerns flooding Brussels.

“What’s the point of having [more tools] if the Chinese can shut down our strategic production in a matter of days?”

Low expectations

Although Šefčovič entered the talks strengthened by the Franco-German letter, a second diplomat said they didn’t foresee a deal with Beijing this week.

“He knows that a lot of member states are behind the Franco-German push,” the diplomat said, adding that this “has been seen in China.” 

But Beijing has little room to compromise, given its reliance on exports to sustain growth amid weak domestic demand and a prolonged property slump.

“The Chinese side is starting to recognize that there is a problem. But I don’t think they are ready to enter into a substantial deal,” said Gunnar Wiegand, a former head of the EU diplomatic service’s Asia-Pacific department.

Wiegand, now a visiting fellow at the German Marshall Fund, said Šefčovič had earned a reputation as a dealmaker in talks on Britain’s exit from the EU and in last year’s trade deal with Trump. This time, however, “both sides are bound by their own circumstances,” he said.

Europe is desperate to halt the erosion of its industrial base, while China remains heavily dependent on exports to sustain economic growth. 

“The Chinese are going to object to being singled out. Even if a deal with the EU would be the most rational solution, other important markets for Chinese exports, such as ASEAN countries, will start asking the same. It will undercut their global market,” he said.