Sefcovic arrives in China armed with Merz and Macron’s ‘decisive’ weapon, but wants to avoid a trade war

Brussels. Maros Sefcovic, the Trade Commissioner, begins a two-day mission in Beijing today, which is seen as crucial for restoring balance to economic relations between China and the European Union. Friedrich Merz and Emmanuel Macron have equipped him with a powerful weapon: a proposal for a new instrument that could lead to China’s exclusion from the EU’s internal market. Following a leak on Bloomberg, Ursula von der Leyen also wanted to lend Sefcovic a hand: the Commission is considering using safeguard measures to restrict imports of Chinese hybrid cars. The EU aims to show Xi Jinping that this time it means business, that it will not accept blackmail, and that it is prepared to engage in a power struggle to safeguard its industry. Nevertheless, the EU’s hope is to avoid a painful trade war. If Beijing calls its bluff, the EU will face a dilemma.

Sefcovic’s visit to Beijing was presented as China’s last chance to capitalise on the EU’s willingness to engage in dialogue in order to restore balance to relations. In 2025, the trade deficit exceeded one billion euros a day. By 2026, it could reach a total of 400 billion euros. For the first time, Germany is also recording a trade deficit. Consequently, some sections of German industry and Chancellor Merz have shifted from being doves to hawks. In June, the heads of state and government set out the strategy. If dialogue fails to bear fruit, there will be a response. Von der Leyen announced two new instruments: the first is intended to help member states cope with retaliatory measures from Beijing; the second is designed to compel companies to reduce their dependence on Chinese suppliers.

Macron and Merz are calling for further action. The EU must equip itself with a new instrument that allows for “the immediate exclusion from the single market” of a third country that “deliberately seeks to undermine the restoration of a level playing field and fair market conditions through political and economic means”. Behind the proposal lies the conviction that the EU has leverage: Beijing needs the European market to sustain its economic growth, even more so following the tariffs imposed by Trump. Sefcovic’s findings will be discussed by leaders at the European Council on 15 and 16 October. Following a mission by a number of Commission officials in late September, pessimism prevails. Sefcovic said he expects “tough” negotiations with the Minister of Commerce, Wang Wentao.

Yet the EU is prepared to settle for very little: its request to Beijing is that it voluntarily curb its exports and open its market to European products. The threat posed by Merz and Macron’s measure risks being empty. When China wielded its leverage last year – cutting off supplies of chips (due to a dispute over ownership of the manufacturer Nexperia) and critical raw materials (during Trump’s trade war) – the EU quickly caved in. Several industries – including the German car industry – were at risk of halting production. The Commission has several other traditional trade defence instruments at its disposal, which it has used with great restraint, ranging from anti-dumping duties to safeguard measures. There is also the ‘bazooka’: the anti-coercion instrument would allow China to be excluded from the single market. Germany has been reluctant to activate it for fear of retaliation from Beijing.