Brussels: European Union leaders are meeting in Brussels on Thursday to discuss stronger trade measures against China, rising energy prices and disagreements over the bloc’s next long term budget, as growing economic pressures raise concerns about Europe’s industrial competitiveness.
The two day summit, which runs through Friday, October 16, brings together leaders from the EU’s 27 member states to consider how the bloc should respond to increasing Chinese exports, high energy costs and the need to support European businesses and households.
One of the main concerns is the EU’s growing trade deficit with China. The deficit in goods trade reached 360 billion euros in 2025, and it could increase further this year. European officials fear that continued growth in Chinese exports could put additional pressure on manufacturers across the bloc.
The discussions come after the EU and China reached a preliminary understanding on trade in hybrid vehicles. The arrangement is intended to manage imports while allowing trade to continue, but it does not resolve the wider dispute between the two sides.
EU Trade Commissioner Maroš Šefčovič has indicated that the preliminary arrangement could reduce Chinese hybrid vehicle imports into the EU by up to 50 per cent. It also includes provisions concerning tariffs on certain European products entering China and the stability of rare earth supply chains.
Rare earth materials are important for industries such as electric vehicle manufacturing and advanced technology. Reliable access to these materials is therefore an important part of Europe's efforts to strengthen its industrial base.
The vehicle arrangement remains a preliminary step, and its practical impact will depend on how it is implemented. European leaders must also consider whether further action is needed in other sectors where domestic producers face increasing competition.
France and Germany have called for a stronger response to imports they believe are harming European industries. Germany's position is particularly significant because it previously opposed EU anti subsidy tariffs on Chinese electric vehicles.
The two countries have also proposed faster action concerning imports of chemicals and plastic products, including polyethylene terephthalate, commonly known as PET, which is widely used in packaging. A new investigation into the relevant imports has been discussed, but its formal status and scope need to be established before any final decision can be reported.
European industrial groups have raised concerns about pressure on manufacturers, including those producing steel, chemicals and machinery. However, competition from China is not the only challenge facing these industries. High energy costs, changing demand and other economic pressures also affect production and employment.
China has rejected the suggestion that its exports are the main cause of Europe's economic difficulties. Chinese Vice Premier He Lifeng recently told French diplomat Emmanuel Bonne that Beijing was willing to work with the EU to improve economic and trade relations.
China has also warned against protectionist measures. The disagreement reflects a wider challenge for both sides as they seek to protect their economic interests while maintaining an important trading relationship.
Energy prices are another major concern at the Brussels summit. European Commission President Ursula von der Leyen told the European Parliament that gas prices had risen by 140 per cent and diesel prices had doubled since the end of February. She also said Europe's additional cost for imported fossil fuels had reached 100 billion euros.
The rising costs are putting pressure on households and businesses, particularly industries that depend heavily on energy. EU leaders are expected to consider temporary measures to ease the burden while discussing longer term ways to reduce Europe's dependence on imported fossil fuels.
One proposal under discussion is a one year delay to certain methane emissions rules affecting oil and gas imports. However, the proposal has not been confirmed as an approved policy change.
The debate also reflects differences among EU members over how quickly Europe should pursue its climate goals while keeping energy affordable and supporting industrial production.
Leaders must also address disagreements over the EU's budget for the seven years from 2028 to 2034. Ireland, which holds the EU's rotating presidency, has put forward a revised negotiating proposal worth 1.62 trillion euros. The proposal remains below the European Commission's original request of 1.76 trillion euros.
The proposed budget is intended to fund the bloc's priorities over the seven year period, but member states disagree over its size and how the money should be distributed. Funding for agriculture and regional development accounts for a large share of EU spending, while the bloc also faces demands for greater investment in competitiveness and other common priorities.
Some countries want tighter spending limits to reduce the burden on national taxpayers. Others are concerned that cuts could weaken support for farmers and less prosperous regions.
A special summit is planned for late November to advance the budget negotiations, indicating that the differences are unlikely to be resolved during the current meeting.
The wider summit agenda includes security, migration, EU enlargement and the war in Ukraine. Ukrainian President Volodymyr Zelenskiy is expected to attend on Friday, when leaders are due to discuss Ukraine's funding needs for 2027.
The Brussels meeting highlights the difficult choices facing Europe as it seeks to protect its industries, manage energy costs and agree on future spending priorities. Although the preliminary understanding with China offers a starting point for further negotiations, the wider trade dispute and the bloc's internal economic disagreements remain unresolved.