EU Eyes China Trade Curbs: Chemicals, Pharma at Risk

European Union ministers have called for striking deals with Beijing to limit imports in critical sectors, including chemicals, machinery, and pharmaceuticals. This initiative aims to address the bloc's substantial and escalating goods trade deficit with China, which has reached an unsustainable level. This deficit swelled to over €370 billion in 2025 and is projected to surpass €400 billion this year.

Earlier in October 2026, the EU and China reached an agreement to significantly reduce imports of hybrid vehicles. European officials view further dialogue with China as a crucial step towards rebalancing trade across more industries. The surge in imports, termed 'China Shock 2.0', is already impacting European manufacturing, leading to factory closures and substantial job losses, with one major automaker expecting to cut 100,000 positions.

China has previously stated it is a partner in solving, rather than causing, the EU's economic challenges. European leaders are exploring options to mitigate the economic impact while engaging in discussions. France's junior minister for trade noted that Chinese authorities respond well to clear and firm communication from a united EU.