DUBLIN — EU and Chinese officials are already discussing the next sectors for trade talks as Brussels prepares to review implementation of their latest understanding in January, EU trade chief Maroš Šefčovič told POLITICO on Friday.
“In January we can assess how it worked and if it delivered all parts of our agreement,” Šefčovič said, referring to an Oct. 9 pact by which China will voluntarily reduce exports of hybrid vehicles to the EU by almost half to 350,000 units in 2027.
That deal also lowers tariffs on European goods such as auto parts and footwear, and smooths exports of rare earth elements to the EU.
After a scheduled January videoconference with his counterpart Wang Wentao, Šefčovič said he hopes the two can deliver results in March 2027 at their next round of in-person talks in Brussels.
“I would like to see that we both have an understanding of what sectors we are going to focus on next,” he said.
The intense engagement with China comes as the bloc seeks to rebalance mutual economic ties, which EU officials say have been distorted by Chinese subsidies, market barriers and a surge in imports. Šefčovič stressed the urgency of the task, given that the EU’s trade deficit with China “reached almost €197 billion in the first half of this year. At this rate, we could break the 2022 record” of €397.3 billion.
“A part of our team is working on implementing all what we agreed, and [another] part of the team is talking to our Chinese counterparts on what should be the next sectors, next areas on what we want to focus the work on. Hopefully with another [Trade and Investment Consultation] in Brussels we can actually deliver the results,” he added.
“The primary objective for us … is to rebalance the trade.”
At a press conference on Friday, the trade chief said the European Commission was looking to shield more sectors from Chinese overcapacity, with plastics the leading candidate for safeguard measures — a mix of quotas and tariffs.
“We are currently analyzing what would be the best candidates and sectors to be addressed” through safeguard measures, he said. “Currently, what I think is the closest, is the plastic sector.”
Brussels is also juggling requests from the EU’s 27 member countries, which all seek to protect the industries that are key to their economies.
Commission President Ursula von der Leyen told EU leaders last week that Brussels wants to shield the chemical and machinery sectors next, POLITICO reported.
Šefčovič added that the European Commission was looking at proposing new trade tools to nudge EU companies to diversify their suppliers, expected in early December.
“We would respect what we have heard from every single business: Keep it simple, no additional reporting,” he said.
The EU executive is also looking to incorporate a proposal by France and Germany for a new tool that would allow Brussels within days to restrict — or even close — access to Europe for countries that severely distort the bloc’s single market.
“It’s better to present a new instrument,” Šefčovič told POLITICO. “We could initiate it very quickly and … act very quickly.”
To compete with Tesla, Rivian, and a host of Chinese automakers, GM’s fourth-gen EV platform will roll out a new central computer and electrical architecture that will debut in 2028 in the Cadillac Escalade IQ.
LONDON — Beijing has threatened to retaliate if the U.K. raises tariffs on Chinese electric vehicles, aligning with the European Union.
Responding to POLITICO’s story that Britain was looking to act in “lockstep” with the bloc to counter China’s market dominance in electric cars, a spokesperson from the Chinese Ministry of Commerce said: “If the U.K. insists on imposing restrictions on Chinese electric vehicles, China will resolutely retaliate and safeguard the legitimate rights and interests of Chinese industries.”
The U.K. is currently working with its European partners to avoid a 10% electric vehicle tariff from the beginning of next year, when stricter rules of origin under the Brexit trade deal kick in.
The British government is also lobbying to be included in the EU’s Made in Europe policies, which give Brussels-made products preferential treatment in certain procurement projects.
U.K. Trade Minister Anas Sarwar told POLITICO on the sidelines of the German-British Business Summit at Mansion House last week that “the more that the U.K. and the EU work together and act in lockstep, the better it is for both the U.K. and the European Union.”
“The automotive sector and partnership remain strong, but do we have to grapple with the challenge that comes from rapid expansion in China? Of course we do,” he added.
China urged Britain to follow World Trade Organization rules and warned it against copying Brussels’ approach, arguing that tariffs on Chinese EVs would be discriminatory.
“China urges the U.K. to abide by WTO rules, think carefully, and not follow the European Union,” said the Chinese Ministry of Commerce spokesperson. “China will closely monitor the U.K.’s developments.”
BRUSSELS — France and Germany on Thursday failed to agree a common position on the scope of the bloc’s future “Made in Europe” rules, as well as on greater flexibility for CO2 emissions cuts and the 2035 combustion engine ban.
The draft quid-pro-quo deal, which was first reported by POLITICO in July, marks a major convergence between the two countries and had been expected to be signed imminently. On Thursday evening, however, the agreement stalled amid opposition from Germany’s Social Democratic Party, the center-left junior partner in the ruling coalition, over concerns it dropped key environmental targets.
“A final agreement has yet to be reached,” a German government spokesperson said.
Earlier this week, French President Emmanuel Macron had suggested the ball was in the German court. “There are political constraints on the other side of the Rhine, and I completely respect coalition discussions,” Macron said Monday on the sidelines of the Paris car show.
Under the terms of the proposed deal, Germany would accept stricter Made in Europe criteria for the automotive sector in the Industrial Accelerator Act, which France has pushed for, in exchange for weakening the combustion engine ban, one of Berlin’s long-term demands.
“In light of the significant technological, economic and geopolitical changes since the existing regulatory framework was established, the Automotive Package should strike a better balance between climate objectives, industrial competitiveness, technological development and the strengthening of European value creation,” the two countries wrote in a draft agreement obtained by POLITICO.
“Based on the Franco-German Ministerial Councils in 2025 and 2026, Germany and France therefore propose a balanced negotiating package combining ambitious CO₂ reduction targets with additional flexibility and targeted incentives for European value creation,” the agreement adds.
Currently, the EU’s target is for companies to reduce combustion engine emissions by 100% from 2021 levels by 2035, with the possibility to ‘earn’ 10% of emissions leeway through initiatives like offsets and investments.
Under the proposed deal, France and Germany want to soften the 2035 target to 90%, and to offer a further 10% leeway in exchange for investments in alternative fuels (for a combined 80%).
Crucially for steel manufacturers and Germany’s leftist SPD, the French-German agreement would axe the green steel investment requirement, removing a key incentive.
“This destroys the lead market for the steel industry,” an industry lobbyist told POLITICO on condition of anonymity to discuss the sensitive topic. In failing to put pressure on automakers to source green steel, the draft deal makes it a “nice-to-have” extra, they explained.
In a concession to Berlin, the draft agreement stresses that the so-called utility factor — which calculates plug-in hybrid emissions based on how often a vehicle’s electric motor is used vs. its combustion engine — should be calculated on lab-based results rather than real-world data, as required by the Commission. The change will help automakers sell more plug-in hybrids while still reaching the broader emissions targets.
In exchange for these emissions concessions, Germany endorsed France’s demand that the scope of the Made in Europe rules under the bloc’s Industrial Accelerator Act be restricted when it comes to the automotive sector.
The text only covers the EU’s 27 member countries and will be extended to the U.K. under certain conditions.
EU industry chief Stéphane Séjourné told POLITICO on Tuesday that he supported the deal as a way of breaking the impasse, and said the U.K. currently qualifies for Made in Europe.
The agreement could resolve a stalemate over both the CO2 regulation and the IAA, in which France and Germany have been on opposite sides. “The elements of this combined package should be adopted as soon as possible and at the same time,” the two countries wrote.
The British government welcomed the potential inclusion of the U.K. in the Made in Europe rules for cars.
“This is a Franco-German proposal and there is still a European process to run, but if confirmed, we welcome the objective to have the U.K. included in the Industrial Accelerator Act, and this would be good news for the British automotive industry and the jobs and investment it supports across the U.K.,” a No. 10 official said in a statement.
If approved, the comprehensive Franco-German deal will still have to be approved by other EU countries and by the European Parliament, which are currently discussing the Industrial Accelerator Act and the automotive package, including emissions targets for automakers.
Carlo Martuscelli, Francesca Micheletti and Graham Lanktree contributed to this report.
Certain obvious questions arise from Chinese President Xi Jinping’s visit to Washington this past week, a spectacle that one observer has described as “diplotainment” rather than actual diplomacy. Exactly how much did Donald Trump abase himself in service to a temporary and transactional friendship with the dictatorial leader of a nation that is, at least by conventional standards, America’s principal strategic enemy?
No one knows; I am tempted to surmise that Trump doesn’t know himself. The man who in sunnier times for his regime enjoyed calling himself “your favorite president” does not seem to be his own favorite president these days. Trump almost visibly glowed with delight when Xi praised the quality of service and attention to detail of his White House visit. “Everything is done to the highest order of perfection, and there is thought in every little detail,” the Chinese president said through a translator. “And it’s greatly appreciated.”
You could describe that as the meaningless courtesies of routine statecraft, but it also suggested a high-flying hotel guest offering his compliments to the concierge: The eggs this morning were entirely delicious. And the way your people turn down the sheets at night: exquisite!
If we could somehow remove ourselves from the anguish and destruction caused by Trump’s improvised policies (which resemble comic-book versions of Big Brother’s “Two Minutes Hate” from the film version of “1984”) and his aggressively stupid public persona, we might be able to perceive some pathos in his predicament. He cannot escape from a situation he believed he had created and felt he could control: He is the massively unpopular elected leader of a rapidly collapsing superpower, whose downward slide he promised to reverse but has only accelerated, perhaps to the point of terminal velocity.
Trump visibly and hungrily longs for things he cannot have: the alleged greatness of the mythological American past, rendered as white supremacist schlock inherited third hand from the more vigorous fascist movements of the last century; the enforced adulation and obligatory public spectacle of a totalitarian regime such as Xi’s China or Kim Jong-un’s North Korea; most of all, perhaps, his own youth as a brash Manhattan philanderer and unstoppable political renegade, when he didn’t fall asleep in public or stumble around awkwardly with an unexplained contraption under his clothing.
Trump visibly longs for things he cannot have: the alleged greatness of the American past, rendered as white supremacist schlock; the enforced adulation of a totalitarian regime; most of all, perhaps, his own youth as a brash Manhattan philanderer and unstoppable political renegade.
To consider such matters is not a distraction; it begins to point us toward the larger and more painful questions behind the Xi-Trump pseudo-summit. It surprised literally no one that the two leaders negotiated no new agreements on regulating A.I. (or “Super Intelligence,” in Trump’s self-parodying rebrand), the status of Taiwan, the sporadic trade war between the two nations or ending the war with Iran and restarting the global flow of Middle East oil. No mention was made of Trump’s vaporware claims last May that the Chinese had agreed to buy hundreds of Boeing aircraft and $10 billion worth of U.S. beef and soybeans, but Xi promised to send two pandas from China’s breeding facility to the Atlanta zoo. So much winning. It’s impossible to calculate.
In large part, the absolute nothingness of this summit reflects the fact that China is already winning across the board and Xi needed nothing from Trump beyond the legitimation provided by a diplotainment spectacle “to the highest order of perfection.” As China scholars Nicholas Bequelin and Yaqiu Wang write in a Foreign Policy analysis published before the summit, over the first 19 months of Trump’s second term, the geopolitical “balance of power has shifted in Beijing’s favor”:
China has weathered the trade war, narrowed the technology gap, tightened its leverage over critical supply chains, increased pressure on Taiwan, and deepened ties with Russia and much of the global south.
Contrary to more Sinophobic commentators, they argue that China’s ruthlessly pragmatic leadership is not interested in dominating the world, or at least not in the same way postwar America did. But it does have a long-term agenda, they write, which includes breaking the global dependence on U.S.-centric financial institutions, discrediting democracy and furthering a historical process Xi has described as “the rise of the East and the decline of the West.”
I don’t disagree with any of that, but the most important aspect of Bequelin and Wang’s analysis gets a little buried beneath a forest of impeccably organized policy details. Xi has no need to strike an overtly aggressive posture and can afford to cosplay friendship with Trump because “the West,” or at least its greatest military and economic power, is doing a terrific job of declining all on its own. To borrow the nostrum attributed to Napoleon, the Chinese president is smart enough not to interrupt an opponent while he’s making a mistake.
It may take generations — if there are any future generations — to measure the scale of America’s self-inflicted damage, which goes well beyond material issues into the realm of psychology or perhaps spirit. (If it’s pretentious to use the Hegelian term Geist, it still fits.) It remains astonishing, not to mention upsetting and enraging, that in the face of a global climate crisis that has already caused millions of deaths and is obvious to nearly everyone on the planet, the U.S. has deliberately chosen to double down on fossil fuels while “China is consolidating its worldwide dominance in batteries, solar, and EVs,” as Bequelin and Wang write.
Faced with America’s spectacular self-own, who can blame people in the Global South for suspecting that the tradeoff between “democracy” and “authoritarianism” was never as straightforward as they were led to believe?
Chinese solar panels and batteries, often offered at steeply discounted prices, are revolutionizing transit and energy issues in many poorer countries, beginning to break the expensive and damaging addiction to foreign oil. Meanwhile, the U.S. has largely abandoned or dismantled its foreign aid programs aimed at fostering economic development, public health and education, while doing its level best to destroy its own reputation as a multiracial secular republic rooted in the rule of law. Faced with America’s spectacular self-own (which didn’t start with Trump, to be clear), who can blame people in the Global South for beginning to suspect that the tradeoff between “democracy” and “authoritarianism” was never as straightforward as they were led to believe?
Despite the widespread anger and disillusionment of Trump’s second term — an encouraging trend, to be clear — it’s still too easy for Americans to duck the biggest and most glaring question of all: To paraphrase one of the greatest works of postmodern angst, how did we get here? It no longer feels remotely adequate (if it ever did) to suggest that angry, vicious people accidentally elected an angry, vicious president who is pursuing a self-destructive and nihilistic agenda, and that at some future date our national sanity and our “indispensable” role in world affairs will be reasserted.
We tried that, remember? It didn’t work. Perhaps, from some great historical remove, Joe Biden’s presidency will appear noble and tragic. But it was also doomed, trapped in a vision of the past every bit as delusional as the MAGA fantasy, and nearly as damaging. The Biden regime’s self-appointed mission of enforcing a “rules-based order” involved pretending that the world had not changed, that America was still widely beloved and admired, that our so-called republic had not bred and nurtured Donald Trump and that he did not embody its bottomless greed, its gleeful ignorance, its wounded and flatulent national pride.
And so we arrive at the final conundrum of the Trump-Xi summit, and our president’s stopped-clock tendency to stumble upon hard truths. In his inimitable ass-backward fashion, Trump has discerned that the “free world” has become a meaningless abstraction and liberal democracy is in a state of systemic failure. He is correct about that, at least to a point. But he can provide no answer beyond prostrating himself before dictators and building monuments to himself in imitation of their grandiosity. If China’s repressive techno-state makes a distinctly unappealing candidate to lead the world into the future, America can only offer competing versions of an imaginary past. Hey, at least we got those pandas.
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