BRUSSELS, October 15 — The story begins with European Union leaders gathering in Brussels on Thursday to confront a mounting economic strain: surging Chinese exports, stubbornly high energy prices, and deep divisions over the bloc’s next seven-year budget. What unfolded over the two-day summit was a stark reckoning with a trade imbalance that has become impossible to ignore. At its heart lies the EU’s goods trade deficit with China, which reached €360 billion (about $400 billion) in 2025 and is projected to exceed that level in 2026.
This deficit has been fueled in part by a flood of hybrid cars from China, prompting the European Commission and Beijing to reach an agreement to limit such imports — a first step, officials say, in a broader effort to rebalance trade. Draft summit conclusions show leaders want the Commission to continue dialogue with China while fully deploying existing EU trade defence mechanisms and introducing new instruments to counter imbalances in sectors including chemicals, steel, and machinery.
A senior EU diplomat, speaking on condition of anonymity, warned that the human cost is rising fast: “We don’t have much time because every month that goes by, thousands of jobs are lost.” The summit also addresses the political fallout of this economic anxiety, with far-right parties gaining traction by exploiting fears over job losses and industrial decline.
Franco-German proposals are expected to shape discussions, calling for urgent action on imports of chemicals and PET plastic used in packaging — a notable shift for Germany, which just two years ago opposed EU anti-subsidy tariffs on Chinese electric vehicles. Energy prices remain a critical flashpoint, with draft conclusions referencing a proposed one-year delay to the EU’s methane emissions rules for oil and gas imports and urging further short-term measures to ease pressure on households and industry.
Countries including the Czech Republic and Italy are pushing to weaken or suspend the EU Emissions Trading System, while the prime ministers of Finland, Sweden, and Denmark defended the system in a joint letter, arguing it strengthens energy security and drives clean industry investment. Budget negotiations for the 2028–2034 period are also underway, requiring unanimous approval and historically divisive between net contributors and recipients, with a special summit planned for late November to seek agreement.
On Friday, discussions will shift to Ukraine’s funding needs for 2027, with President Volodymyr Zelenskiy expected to attend, and leaders are likely to express regret over the U.S. decision to temporarily lift sanctions on Russian diesel.
Dutch Prime Minister Rob Jetten urged European leaders to increase financial, military, and non-military support for Ukraine, stating, “I call upon all the European leaders to do more financially, militarily and non-military, because a lot of European countries are lagging behind in the support of Ukraine.” Looking ahead, the outcome of these debates will determine whether the EU can forge a unified response to economic pressures from China, energy volatility, and the ongoing war in Ukraine — or whether divergent national interests will once again stall collective action.
