Key facts
- China is seeking Germany's help to avoid potential EU trade sanctions.
- The EU's trade deficit with China reached €36.5 billion in July, with daily imports from China exceeding exports by €1.18 billion.
- EU officials are considering measures like quotas on Chinese hybrid vehicles and chemicals.
- Imports of hybrid cars into the EU have seen a tenfold increase.
- The trade imbalance is expected to be a key topic at an upcoming EU-China meeting in October.
- Chinese exports, including rare earths, are also on the agenda for the summit between Xi Jinping and Donald Trump.
China is seeking Germany's assistance to avert potential trade sanctions from the European Union, a move that comes just days before a significant summit between Chinese President Xi Jinping and US President Donald Trump. Beijing is reportedly worried about the EU's consideration of measures targeting Chinese electric vehicle exports and other products.
The diplomatic effort highlights China's strategy to mitigate the impact of potential trade disputes with Western economies, particularly as global trade relations face increasing complexity. Consumers and businesses in the EU are spending three times more on Chinese imports than their counterparts in China are buying from the bloc, with the trade deficit reaching €36.5 billion in July alone. The Mercator Institute for China Studies (Meric) noted that the imbalance has moved beyond three to one, with the deficit equivalent to €1.18 billion a day.
EU officials are considering measures such as introducing quotas on hybrid vehicles and certain types of chemicals imported from China. Imports of hybrid cars into the EU have grown tenfold from just under 4,000 vehicles in October 2024 to 50,000 in July 2026. China has repeatedly warned it is ready for a trade war, but its commerce ministry has maintained that diplomacy is preferred ahead of the upcoming EU-China meeting on October 8, where the widening imbalance will likely be a key agenda item. Chinese exports, including rare earth export restrictions that were suspended in October 2025, will also be discussed at the summit between Xi Jinping and Donald Trump.