European Trade Commissioner Maros Sefcovic is in Beijing for discussions regarding the EU's increasing trade deficit with China.
Sefcovic is set to meet with Chinese Commerce Minister Wang Wentao on Thursday and Friday following months of talks regarding the EU's daily trade deficit exceeding €1bn ($1.12bn) and China's restrictions on exporting rare earth elements and other essential minerals.
At the same time, Chinese firms are progressively competing with Europe’s leading automobile manufacturers. China turned down the EU's appeal for voluntary limits on exports of Chinese hybrid cars as both parties commence talks,as per reports.
European Commission is now seeking to persuade Beijing to agree to a unilateral EU measure to limit hybrid imports instead, the outlet reported, referencing two diplomats informed about the strategy.
The two days of talks occur right after a majority of EU legislators urged for a firmer trade strategy with Beijing in a non-binding resolution on Wednesday.
Also Read: Rubio Starts European Tour in Iceland to Boost Security Ties
China promised a “determined reply” to protect its industries if the European Union proceeds with limitations against Chinese firms or goods, as stated by its commerce ministry.
French President Emmanuel Macron and German Chancellor Friedrich Merz, the heads of the two largest powers in the bloc, on Tuesday called on the EU to develop a “credible instrument” that could be swiftly employed to retaliate against nations that negatively impact the bloc economically.
Also Read: Germany Warns Chinese High-Tech Products May Pose Security Risks
The new policy would not aim at any particular nation. German authorities stated that the EU required a mechanism as robust as the Section 301 tariffs enacted by the United States or China's limitations on vital mineral exports.
Also Read: EU Allocates €1.24 Billion for Ukraine’s Drones and Munitions
The suggested weapon – set for discussion at an EU leaders' summit next week – would empower the European Commission to react to trade aggression within days.