The European Council opened in Brussels on Thursday with three fights running at once. Leaders of the 27 member states are debating how to curb surging exports from China that industry groups blame for factory closures, how to respond to high energy prices since the Iran war, and how to bridge wide differences over the 2028 to 2034 budget, which needs unanimity and already has a special summit set for late November.
China is the organising question. The bloc’s goods trade deficit with China hit 360 billion euros in 2025 and is on course to pass that level this year. Less than a week ago the Commission secured an agreement with Beijing to limit imports of Chinese hybrid cars, a first step after leaders tasked the Commission in June with producing concrete results by October. Draft conclusions would have leaders ask the Commission to keep talking to Beijing while making full use of trade defence measures and adding new protective instruments. Beijing says talk of imbalances is an excuse for protectionism.
The shift inside the room is Germany’s. Franco German proposals released last week call for urgent measures on imports of chemicals and PET plastic and for tools to retaliate quickly against countries that harm the bloc, a sharp turn for a German government that two years ago led criticism of EU anti subsidy tariffs on Chinese electric vehicles. Chancellor Friedrich Merz said positions on the budget remained far apart, with net contributors such as Germany facing net beneficiaries, and called the negotiations very difficult.
Energy and climate policy cut across the trade debate. The draft conclusions call high energy prices an issue of critical importance and point to Commission proposals including a one year delay to methane rules for oil and gas imports. The Czech Republic and Italy want the Emissions Trading System weakened or suspended; Finland, Sweden and Denmark wrote in defence of the system as an energy security tool. On Friday leaders turn to Ukraine, with President Volodymyr Zelenskiy attending and Ukraine’s 2027 funding needs on the table, alongside expected regret over the US decision to temporarily lift sanctions on Russian diesel. Status: summit in session, conclusions not yet adopted.