Despite ups and downs in the bilateral relationship between China and the EU, as was the case in December 2024 when electric vehicle disputes weighed heavily on trading ties, both sides have remained long-time strategic partners. However, in April 2025, ties were fractured, trust deficits emerged and lingering suspicions loomed large.
The crisis emerged when the EU employed anti-dumping tariffs, primarily on Chinese EVs, which resulted in a sharp rebuke from Beijing. China accused Brussels of adopting anti-competitive, protectionist and populist measures that harm bilateral relations. Current economic restrictions include duties on Chinese construction machinery and market barriers on China’s ability to access medical devices. The argument from Brussels is that Beijing’s products are gaining an unfair advantage in their domestic markets, which is damaging local industries; however allegations have also centered on China engaging in industrial espionage and cybersecurity threats, which although unsubstantiated, has shifted Beijing’s profile in Europe from being a cooperative partner to a strategic rival.
Regardless, China and the EU share an extensive, strategic and meaningful relationship that dates back to 1975 when ties were established with the European Economic Community. In light of this, both sides have a stake in upholding a rules-based international order on economics, trade and cooperation, given the prevalence of decoupling, export controls and trade restrictions globally.
For this to happen, however, EU member states should eschew unilateral measures against China and adopt more constructive approaches. This is what Foreign Minister Wang Yi emphasized on in his telephonic conversation with German counterpart Johann Wadephu on May 19, 2025. Populism and recklessness should not jeopardize 50 years of diplomatic relations between the two sides, and the EU has much to gain from maintaining the status quo with China rather than altering it.
So far, measures adopted, such as the unresolved anti-subsidy probe on Chinese EVs between the two sides, only serve to harm economic interdependence. Instead, differences should be dealt with through dialogue, which builds on the spirit of previous EU-China summits as well as the Comprehensive Agreement on Investment (CAI). The CAI seeks to eliminate joint venture requirements and quantitative restrictions on several sectors that EU companies deal with while operating in China.
This is important. As of 2025, China is the EU’s second-largest trading partner, while the EU remains a significant export market for Chinese products. This has been made possible due to the existence of a predictable environment for trade and commercial sides to flourish, as acknowledged by the ambassador of the EU to China, Jorge Toledo, at a conference on 50 years of diplomatic relations between the two sides. Toledo highlighted how trade hit $2 billion per day due to excellent cooperation and remarkable success between the two sides.
Note, however, if the EU persists in implementing protectionist policies, disregarding amity and goodwill in the process, critical supply chains on pharmaceuticals, machinery and EV vehicles will be disrupted, which will have a damaging impact on its domestic economy.
In an age of tariffs and anti-trade activities, the EU and China can also cite historical precedents to build on and carry forward existing understandings. Note further that both sides benefited from institutions such as the World Trade Organization, where Germany secured legal frameworks for high-value exports such as for German automakers, BMW and Mercedes-Benz, and benefited from lower tariffs and more streamlined access to markets such as China.
A commitment to multilateralism has allowed the EU to challenge trade barriers imposed by the United States in 2019, which again shows that if the bloc remains committed to multilateralism, it benefits from increasing trading ties and dispute resolution mechanisms. Also, China benefits from increased foreign direct investments (FDI) and market access, constituting a win-win situation for both sides if the EU upholds the existing international order.
The EU has a global responsibility to prevent the fracturing of the world economy, which continues to be jolted by the U.S. President Donald Trump's administration’s levying of tariffs on countries worldwide in 2025. However, this cannot be done with binary approaches; instead, it involves inclusive global development whereby the developing world, at the receiving end of export and technology controls and sanctions, is integrated into international trading networks. This presents an opportunity for the EU and China to work together for sustainable development while building on existing investments in green technologies and digital innovation.
Protectionism slows progress on climate governance, planned reductions in carbon emissions and digitalization. A strong EU-China partnership, however, can potentially offset the effects of protectionism by taking a lead on green trade frameworks as well as neutrality and AI governance. Again, for this to materialize, the EU needs to adopt policies that consider China a legitimate stakeholder instead of a competitor, which will uplift global standards on green economics and digital trust frameworks.
Bilaterally, China’s relationship with Germany points to optimism for the trajectory of China-EU ties, given that both Berlin and Beijing have sought to become predictable and reliable partners for one another, as mentioned by German Foreign Affairs Minister Johann Wadephul. Upholding the one-China policy while seeking to adopt a proactive, prudent and pragmatic approach toward China makes it possible that Germany, as a leading power in the EU with immense influence, can address issues such as the anti-subsidy probe on Chinese EVs through dialogue and deliberation between China and the EU.
As a result, the EU as a bloc should follow Germany’s footsteps and eschew provocative measures against China and multilateralism to benefit from a strong international system and the safety of global supply chains.
