EU leaders weigh China trade steps at Brussels summit

BRUSSELS: European Union leaders meet in Brussels on Oct. 15 and 16, 2026, to decide whether an interim trade deal with China on hybrid cars is enough, or whether the bloc needs tougher limits on Chinese imports, Reuters reported on Oct. 14.

The stakes are large. The EU’s goods trade deficit with China was €360 billion last year and reached €200 billion in the first six months of 2026, Reuters reported. European Commission President Ursula von der Leyen has called the deficit “unsustainable” and said the EU will use every means to reduce it, according to the same report.

The European Council, the body that brings together the leaders of the 27 member states, lists “global macroeconomic imbalances” under competitiveness on its official summit page. The page does not mention China by name and no draft conclusions had been published when we checked. The agenda also covers the 2028-2034 EU budget, Ukraine, defence, migration, enlargement and the Middle East.

The deal on the table came out of two days of talks in Beijing. EU Trade Commissioner Maros Sefcovic announced on Oct. 9 that China had agreed in principle to moderate hybrid and plug-in hybrid exports, and he said it could cut them by more than half, as we reported on Oct. 10. The Associated Press reported that neither side had released clear details and that the deal needs the approval of EU leaders. It also reported that China would ease export licensing for rare earths and permanent magnets, and that it would lower tariffs on EU car parts, olive oil and footwear covering almost €4 billion in current exports.

Electrive, a trade publication, reported on Oct. 11 that a Commission representative later put the cap at 350,000 hybrid vehicles a year from Dec. 1, 2026, rising by up to six per cent annually. We have not seen that figure in an official document, so it should be treated as unconfirmed. Electrive also cited the European car makers’ association ACEA, whose director-general Sigrid de Vries welcomed the move as a positive step while saying details still need clarifying.

Sefcovic called the deal “a very good result” but only a first step, Reuters reported. France and Germany have proposed joint measures on the deficit, including on chemicals and PET plastic, Reuters reported. It described that as a shift for Germany, which opposed EU tariffs on Chinese electric vehicles two years ago. Reuters said Volkswagen plans to cut 100,000 jobs in Germany, which sharpens the political pressure on Berlin.

Several leaders arrive weakened at home, Reuters reported. French President Emmanuel Macron faces student protests and a budget deadlock, German Chancellor Friedrich Merz’s coalition is struggling after regional defeats, and Spanish Prime Minister Pedro Sanchez faces a snap election on Nov. 29. Reuters said the Commission is likely to propose its first new trade measure in December.

For Canadians, the decision matters indirectly. Canada is not part of the talks, but the outcome shapes the trade climate Ottawa will meet in Montreal when Prime Minister Mark Carney hosts von der Leyen and European Council President Antonio Costa for the Canada-EU summit on Oct. 29 and 30. What leaders decide this week will also show how far the EU is prepared to go with trade defences.

This story is developing. Leaders had not agreed on any conclusions as of Oct. 14, and the summit outcome is expected on Oct. 16.

Via Reuters, the Associated Press and Electrive.

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