China deepens divide-and-conquer trade strategy across Europe

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China’s EU trade strategy

Highlights

Beijing intensifies divide-and-conquer strategy by pressing Brussels on trade while cultivating relations with smaller, more vulnerable EU states.
The EU sets an October deadline for visible progress on China's trade surplus, with ongoing risks of a China-EU trade conflict despite a three-month truce.
China demands lower EU tariffs on electric vehicles and looser Dutch chip equipment export rules, while leveraging ties with the UK and Morocco to access the EU market.

Trade talks face pressure from widening surplus

As reported by Financial Times, Beijing is attacking Brussels on trade while separately cultivating ties with more vulnerable EU member states, according to analysts who say the approach is a longstanding tactic in China-Europe relations. The strategy coincides with an EU anti-dumping campaign targeting Peking duck imports and with broader concerns over Chinese state support for exporters.

The EU and China are holding consultations in four areas agreed in June by trade commissioner Maroš Šefčovič and commerce minister Wang Wentao, covering trade and investment balancing, export controls, intellectual property rights and WTO reform. Šefčovič sets an October deadline for tangible results on China’s surplus with the bloc, while analysts warn that the imbalance continues to raise the risk of a China-EU trade conflict despite a three-month trade truce.

Beijing is also pressing its own demands, including lower EU tariffs on Chinese electric vehicle imports and the removal of Dutch restrictions on exports of chipmaking machines from ASML to China. A senior European diplomat recently describes the tone of the discussions in Beijing as better than it has been in months, if not years.

Member states and companies face uneven exposure

Analysts say China is pairing pressure on EU institutions with targeted outreach to national capitals, exposing differences inside the bloc and making smaller or more dependent members more vulnerable to coercion. Joerg Wuttke of DGA Group says Chinese leaders have long preferred to deal with Europe as many voices rather than a single actor, a tactic he argues repeatedly works.

That contrast is also visible diplomatically. EU leaders have yet to visit China this year, even as Beijing hosts individual European leaders including German Chancellor Friedrich Merz and Spanish Prime Minister Pedro Sánchez after tense exchanges with Brussels over the trade surplus and Ukraine.

China’s outreach extends beyond the bloc itself, with analysts saying Beijing is leveraging ties with neighbouring countries such as the UK and Morocco to gain access to the EU single market. At the same time, many European companies with operations in China are dealing with export controls on rare earths imposed last year during the trade war with the U.S., adding to pressure on industrial supply chains as Europe debates how far to harden its trade stance.

In our earlier coverage of the U.S.-EU trade dispute tied to the EU’s digital competition enforcement, we explained how Brussels’ fines on Google and other major U.S. tech firms triggered Washington’s threat to open a Section 301 investigation. We also noted that Section 301 duties and shifting tariff frameworks can quickly reshape supply chains and cross-border business planning—context that helps frame today’s growing trade pressure on Europe from other partners as well.

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