The European Union’s trade chief, Maros Sefcovic, met with Chinese Commerce Minister Wang Wentao on Monday, seeking to reshape a lopsided trade relationship and prevent a summer of discontent between Brussels and Beijing.
In 2025, China’s trade surplus with the EU hit C$584 billion. The trading relationship “is simply not sustainable,” Sefcovic told media on June 9. He added: “China is a huge economy, but we export to China less than we export to Switzerland.”
China’s yuan — undervalued by at least 16 per cent, according to the IMF — is also part of the problem. On June 19, German leader Friedrich Merz said that “an artificially low currency is an advantage for those who want to improve their economic competition positions.”
Beijing fired back immediately, cancelling preparatory meetings between the two sides. The Chinese Communist Party-controlled China Daily published a scathing op-ed, accusing EU officials of a “lack of sincerity” and foreshadowing “forceful and effective countermeasures.” Another government-run website was more colourful: “Europe's mindset is reminiscent of Rose's mother in Titanic — desperately clinging to a fading aristocratic glory while refusing to accept that the world has moved on.”
Tensions were high going into Monday’s meeting, but Sefcovic and Wang made some progress, setting up the EU–China Trade and Investment Consultations to tackle “priority issues,” according to Sefcovic, including “trade and investment balancing, export controls, and [intellectual property rights].” Sefcovic will travel to Beijing in October.
To EV, or not to EV?
On June 18, the EU’s 27 national leaders met in Brussels to discuss the Russia–Ukraine war and “economic imbalances” (code for “China”). The leaders endorsed a tougher approach on China, encouraging European Commission President Ursula von der Leyen to “develop [...] a toolbox in the area of trade defence and industrial policy.” These tools could include measures targeting Chinese industrial overcapacity (e.g. tariffs and quotas) or requiring European companies to diversify their sources of critical supplies.
The EU already imposes countervailing duties on Chinese electric vehicles, ranging from 17 per cent on BYD to 35.3 per cent on SAIC, on top of a standard vehicle-tariff of 10 per cent. The EU’s approach in this sector could inform future measures.
Ottawa's approach to this issue is different, allowing up to 49,000 Chinese EVs into the country annually at a most-favoured-nation tariff rate of 6.1 per cent. Reuters reported last week that EVs from China’s Geely are expected to arrive in Montreal later this month, the first shipment under the Canada–China agreement inked in January.
China is expected to produce 12 million EVs this year. For context, in 2025, 169,972 zero-emissions vehicles were sold in Canada.
