Talks between Maros Sefcovic and Chinese Commerce Minister Wang Wentao open against a record trade imbalance and growing European concern over rare-earth controls. The test is whether Brussels can turn de-risking from a political slogan into practical leverage without triggering retaliation it is not prepared to absorb.
China’s Commerce Minister Wang Wentao is meeting EU Trade Commissioner Maros Sefcovic in Brussels on Monday as the European Union tries to convert years of warnings about dependence, overcapacity and unequal market access into a more enforceable economic policy.
The meeting comes after EU leaders instructed the European Commission to produce results from dialogue with major trading partners and ensure that the bloc possesses the instruments needed to defend its interests. China’s goods surplus with the EU reached EUR360.6 billion in 2025 and expanded further during the first four months of this year.
The imbalance is only one part of the dispute. European manufacturers have been affected by Chinese restrictions on rare-earth exports, while Brussels is developing rules that could oblige companies to diversify critical supplies. Beijing, meanwhile, objects to EU measures affecting electric vehicles, procurement and subsidised imports.
The discussion is therefore not a conventional attempt to reduce a trade deficit. It is a negotiation over which side can use access to its market, materials and technology as leverage.
Rare earths give Beijing immediate power
China dominates the processing of several rare earths and the manufacture of permanent magnets used in electric vehicles, wind turbines, industrial machinery, electronics and defence systems. Export licensing can disrupt European production even when the underlying minerals were extracted elsewhere.
Beijing introduced tighter controls in response to wider trade tensions, arguing that such measures are normal tools for protecting national security and meeting non-proliferation obligations. European companies have experienced the practical consequence as delayed approvals and uncertain delivery schedules.
This makes rare earths different from the broader trade deficit. Brussels can investigate subsidies or impose tariffs, but it cannot rapidly create alternative refining and magnet capacity. New mines and processing plants take years to permit and finance.
The EU has begun preparing emergency measures. A planned critical-minerals stockpile would give Europe a limited buffer against Chinese supply disruption, while a separate mechanism is intended to connect buyers with suppliers outside concentrated markets. These tools buy time; they do not eliminate dependence.
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De-risking is moving towards obligation
For several years, EU leaders have insisted that their objective is de-risking rather than decoupling. The distinction means continuing extensive trade with China while reducing exposure in strategically important sectors.
The difficulty has always been implementation. Companies may agree that concentration is dangerous but resist changing established suppliers when alternatives are more expensive. National governments also differ over how much economic pain they are willing to accept. Export-oriented states fear Chinese retaliation, while countries with weaker industrial exposure tend to support stronger defensive tools.
The Commission is now considering rules that could require companies in sensitive sectors to diversify suppliers. If adopted, such legislation would move de-risking from voluntary corporate strategy into regulatory obligation.
Wang is likely to argue that these measures discriminate against Chinese business and politicise normal commerce. Sefcovic will need to show that diversification is a proportionate response to concentrated risk, not a disguised attempt to exclude China.
Market access remains structurally unequal
European complaints extend beyond minerals. Companies operating in China face concerns over subsidies, local preferences, technology transfer, data rules and access to public contracts. Chinese firms, by contrast, can often sell into the EU’s open market while benefiting from scale, state support and a protected home base.
Brussels has responded with countervailing duties on Chinese electric vehicles, the Foreign Subsidies Regulation, procurement restrictions and an expanding economic-security agenda. Each instrument addresses a specific problem, but their combined use risks retaliation against European agriculture, luxury goods or industrial exports.
This is why Monday’s meeting matters. Dialogue can prevent every dispute from becoming a tariff escalation, but dialogue without measurable outcomes can also allow dependencies to deepen.
The Commission needs concrete benchmarks: faster and more predictable rare-earth licences, progress on market access, transparency over subsidies and a mechanism for resolving restrictions before they stop production. General promises of cooperation will not be enough for companies making investment decisions.
Europe must withstand the leverage it creates
Trade defence is credible only if the EU can absorb the response. If Brussels restricts subsidised imports but retreats when Beijing targets a politically sensitive sector, the lesson for China will be that pressure works.
That makes internal coordination essential. Member states need agreement on emergency support for affected industries, shared stockpiles, alternative suppliers and the conditions under which the Anti-Coercion Instrument might be used. Otherwise, China can negotiate separately with national capitals and exploit differences in exposure.
The wider G7 effort to reduce dependence on dominant critical-mineral suppliers has already drawn a firm Chinese rejection. Europe’s problem is that allied agreement on the diagnosis has moved faster than investment in alternative capacity.
A negotiation over time
China’s strongest advantage is immediate: it controls supply chains that European factories need now. The EU’s strongest advantage is the size and regulatory power of its market, but using that power takes political agreement and legal procedure.
The Brussels talks will not resolve that imbalance in one day. Their value lies in whether they produce a workable reduction in immediate risk while Europe builds longer-term alternatives.
Sefcovic must avoid two failures. One would be escalating faster than European industry can adapt. The other would be accepting temporary assurances that postpone diversification and leave the bloc exposed to the next licence restriction.
The meeting is therefore a test of resolve as much as diplomacy. Europe has spent years describing its China problem. It now has to demonstrate that de-risking can protect industry without becoming either empty language or uncontrolled economic confrontation.
