Francesca Ghiretti

Research Leader, RAND Europe China Initiative

The short answer is yes. The EU has never lacked the means to negotiate with China or manage an increasingly unbalanced competitive relationship. Both in terms of material leverage—notably via the single market—and the regulatory tools needed to deploy that leverage, the EU is well-positioned. What it has consistently lacked is credibility. Credibility that it is willing to use the instruments at its disposal and, more importantly, that member states are willing to use those instruments collectively.

Things have begun to change over the past few months. Member states have increasingly converged around the view that the economic challenge posed by China could become existential for Europe. With a more common understanding of the challenge and a shared objective, the prospect of acting as one has improved considerably. Yet, the burden of addressing this challenge cannot fall on only a handful of frontline member states. The EU must find a way to distribute both the costs and responsibilities across all twenty-seven.

Following Chinese President Xi Jinping’s visit to Washington, China may feel more confident and reassured; that is likely to shape its approach to negotiations with the EU. Ultimately, however, the bloc remains one of China’s most important economic partners, and Beijing is well aware of that.

Noah Gordon

Senior Policy Fellow, European Council on Foreign Relations

The EU will not be able to scale up non-Chinese supplies of rare earths and other critical materials in time for the coming showdown with Beijing. It takes years to open a mine or refining project, and China, which produces over 90 percent of the world’s refined rare earths and permanent magnets today, will retain a dominant position through 2030. What’s more, despite the recent opening of facilities in France and Estonia, the EU still lags behind the United States and Japan when it comes to building alternative supply chains.

But that doesn’t mean the EU can’t stand up for itself. It has to play offense: China relies on EU supplies of aircraft parts, specialty chemicals, chip machinery, and advanced machine tools—not to mention the consumers in big and wealthy EU market. The task for European Commissioner for Trade Maroš Šefčovič and the member states he represents is to demonstrate to China that there would be a cost to applying export controls that hurt European interests. By demonstrating its willingness to apply tariffs and favor European producers, Brussels can pressure Beijing into keeping fairer trade going. 

Noah Barkin

Senior Advisor, Rhodium Group

The EU faces a choice: Do nothing and watch its industrial base vanish, or take more forceful measures to protect its companies from crushing Chinese competition. The first option is not defensible. It would lead to mass job losses, further increase dependencies, and add fuel to the populist wildfire that is already spreading across the continent. The second path is fraught with risks—above all that of Chinese retaliation. Europe has no choice but to accept these risks and try to manage them as best it can.

This starts with how it deploys its trade tools. Brussels needs to take care to avoid giving the impression that it is the one escalating this conflict—proceeding methodically, without fanfare, while keeping the door open to dialogue. This will help keep European member states and industry on board, while reducing the risk of an overreaction by China.

Beijing may have a formidable weapon in its control over rare earth supplies. But if it hits back too hard, it will lose Europe and access to its market. That would be a catastrophe for China’s export-dependent economy. For Europe, what is essential now is unity, a belief in its own leverage, and nerves of steel.

Zsuzsa Anna Ferenczy

Member of the Academic Council, Wilfried Martens Centre for European Studies

Rebalancing trade with China is becoming an existential issue for the EU. The country is running a goods surplus with the bloc of roughly €360 billion ($402 billion) annually, while the union’s deficit with China reached €103 billion ($115 billion) in the second quarter of 2026 alone. But the danger is not simply the deficit. It is Europe’s strategic exposure: critical raw materials, batteries and industrial inputs, high energy costs, weak investment, and political fragmentation.

The EU is confronting China while simultaneously confronting its own vulnerabilities. Its leverage lies in the size of its market, but that leverage is credible only if the twenty-seven governments can act collectively and accept some economic pain. China can exploit fragmentation, but it cannot easily ignore the collective weight of the EU market.

Brussels must prioritize making market access increasingly valuable to retain, using it as bargaining chip linked to reciprocity—mindful that China’s dependence on export-led growth makes the EU single market indispensable. Second, it should accelerate the diversification of its critical minerals supply, particularly in southeast Asia, not simply to find alternative sources but also to build a broader network of resilient partnerships, processing capacity, and stockpiles. Third, it should mobilize more capital into European manufacturing and technology.

Etienne Höra

Project Manager, Bertelsmann Stiftung

To stand up to China, the EU needs to figure out how to pay for the consequences.

In the last six months, the need to rebalance trade relations with China has become a broad consensus across the EU. Even those industries that used to gain the most from the China business now face enormous pressure, paving the way for a tougher stance. But consensus needs to withstand agreement on concrete measures and when China responds with more export controls, which may have massive economic consequences for the member states.

De-risking is unlikely to make substantial progress before the current trade tensions come to a head. The EU has a structural disadvantage when it comes to absorbing economic pain: As a democratic polity where decisionmakers are accountable to citizens and as a supranational entity whose internal fault lines can be easily exploited. However, in the short term it can make more of the cards it has been dealt by ensuring that the costs of retaliation are distributed among member states and cushioned where necessary. As the EU’s budget offers little wiggle room, European countries would need to step in—an option with its own challenges for the bloc’s cohesion.