Dear ICES friends,
We are delighted to present the latest issue of our bi-weekly newsletter.
Few relations are as crucial and valuable as the ones - past, present, and future - connecting
Europe and China. At ICES, we believe that regular knowledge-sharing can be the bedrock that empowers
mutually beneficial partnerships and the foundation for fruitful collaborations. Every first and
third week of the month, we highlight the latest developments and fresh ideas across various fields
to enhance cross-continental communication and understanding. We invite you to explore the key
news highlights, insights, and top event recommendations from the past two weeks.
The ICES Takeaway from this Edition
It has been a busy first half of October for EU-China relations.
Both the visit of the EU trade chief to China and the subsequent European Council summit
were subject to intense scrutiny from member states, commentators, and experts alike.
Although warnings of trade wars were abound in the press and across Brussels think tanks,
negotiations between Wang Wentao and Maroš Šefčovič yielded concrete results, temporarily
halting the prospect of further escalation. Key outcomes include a cap on hybrid vehicles
exported to Europe, Beijing’s commitment to expedite administrative procedures for rare
earth exports, and tariff liberalisations for European goods entering China, ranging from
automotive parts and footwear to olive oil and ice cream.
However, it seems that these achievements are not enough to slow down the EU’s economic
security drive. The European Commission is expected to present a ‘kill-switch’ mechanism
that would allow for the rapid closure of the EU market when it is deemed excessively
distorted by third countries. Chinese officials swiftly denounced the initiative, warning
that mounting pressure would undermine ongoing negotiations in other industrial sectors.
Meanwhile, this month’s Paris Motor Show provided a platform for European automotive
leaders to advocate for stronger industrial protections, as competition from affordable,
high-tech Chinese vehicles becomes increasingly difficult to match.
Finally, this edition’s research and commentary section draws attention to the work of
Linda Calabrese and Jodie Keane, who examine how current tensions and tariffs on Chinese
vehicles may have the unintended consequence of transforming countries such as Morocco
into global hubs for electric vehicle manufacturing.
To support a deeper understanding of these developments, ICES maintains the EU-China
Policy Library,
which enables analysts and researchers to examine rare earth export controls, economic
security measures, regulations, and proposals originating in Brussels and Beijing. The
collection now includes nearly 90 entries.
Additional updates will follow quarterly. Furthermore, last week, ICES provided readers
with targeted analysis on European Trade Defence mechanisms.
You can read the
latest edition
of the EU-China Policy Deep Dives and subscribe to it
here!
ICES wishes you a pleasant read of this edition!
NEWS ROUND
THE WEEKS' HIGHLIGHTS: PROGRESS AND PITFALLS
EU trade chief hails ‘crucial first step’ as Beijing talks avoid
trade war
euobserver,
Global
Times,
The
Guardian, October 12, 2026
To avert a trade war and address bilateral imbalances, the EU and China agreed on reciprocal trade concessions, including expanded import quotas and tariff concessions alongside a WTO-compliant EU cap of 350,000 Chinese hybrid vehicles annually starting in December.
Emboldened by hybrid car deal, Europe coalesces around tougher
China stance
SCMP,
October 15, 2026
Emboldened by recent negotiations that yielded a surprise deal on hybrid cars, Brussels is adopting a two-track strategy that combines continued intensive dialogue with an intensified crackdown on Chinese trade practices. Commission President Ursula von der Leyen expressed broad support for developing a French-German trade instrument that would allow the quick expulsion of Chinese companies from the EU market.
EU-CHINA RELATIONS
China launches anti-dumping probe into EU p-nitrotoluene imports
on domestic industry application, citing injury to Chinese
producers: MOFCOM
Global Times, October 03, 2026
China's Ministry of Commerce launched an anti-dumping investigation into EU imports of p-nitrotoluene following a domestic industry application that met Chinese law and WTO criteria.
France, Germany seek new EU rapid response tool against trade
threats
France 24, October 05, 2026
Ahead of EU Chief Ursula von der Leyen's visit to China, French President Emmanuel Macron and German Chancellor Friedrich Merz announced plans for a legal tool enabling the EU to respond rapidly to unfair trade practices such as dumping.
EU toughens China stance ahead of Šefčovič’s Beijing visit
Politico and
European
Parliament, October 07, 2026
Ahead of Trade Commissioner Maroš Šefčovič's trip to Beijing, European policymakers, lawmakers, and leaders are uniting around a tougher geopolitical and economic strategy toward China that includes expanding the European Commission's powers to restrict distorted imports.
44 European organisations call for fair competition through more
ambitious EU Trade Defence
Orgalim, October 08, 2026
Facing state-driven distortions, high energy costs, and a massive trade deficit with China, European industry urges member states to bolster DG Trade's staffing, maximise existing trade defence instruments, and introduce a targeted policy toolkit to safeguard EU competitiveness.
The People's Bank of China clarifies its stance on RMB exchange
rate policy.
Weixin, October 10, 2026
Clarifying its RMB exchange rate stance on October 8, the People's Bank of China affirmed its managed floating exchange rate system, denied using currency devaluation for competitive trade advantage, and rejected claims attributing global economic imbalances or RMB undervaluation to its currency policy.
Model blitz at Paris motor show as Europe-China rivalry heats up
Reuters, October 12, 2026
European automakers launched new models at the Paris car show to counter rising Chinese competition, even as Chinese brands continue expanding their European footprint.
Stellantis CEO urges incentives for carmakers who build in
Europe as Chinese rivals gain ground
CNBC, October 12, 2026
Facing declining market share and increased pressure from Chinese competitors, Stellantis CEO Antonio Filosa is urging European regulators to enact "Made in Europe" legislation that incentivises and protects local vehicle manufacturing.
China State Media Warns EU Against ‘New Tricks’ After Car Deal
Bloomberg, October 13, 2026
Following a new agreement capping Chinese hybrid vehicle imports, Beijing has stated it will hold the EU to the accord while warning of WTO dispute actions and trade countermeasures if further restrictions are imposed.
EU’s China Trade Imbalances Go Beyond Autos, Dombrovskis Says
Bloomberg, October 13, 2026
The EU aims to expand trade rebalancing efforts across additional sectors to address its €360 billion bilateral trade deficit.
As EU debates local-content rules, Chinese automakers are
already adapting
Reuters, October 13, 2026
Anticipating proposed European "Made in Europe" local-content rules that remain mired in political dispute, Chinese automakers are proactively building manufacturing plants and supply networks across the continent.
Britain draws red line over EU pressure to raise Chinese car
tariffs
The Telegraph, October 14, 2026
Rejecting EU demands to align with its higher tariff regime on Chinese electric vehicles in exchange for market access, UK Business Secretary Jonathan Reynolds stated that Britain will prioritise its own national trade interests over European policy pressure.
China and Europe call for strong oversight of AI-generated
content
China Daily, October 14, 2026
At the EU-China Roundtable on Copyright Protection in the Digital Environment, Chinese and European legal experts called for revising copyright frameworks and strengthening technical regulations to ensure robust oversight of AI-generated content.
EU to Remove Sanctions on Chinese Firm to Save ASML Supplier
Bloomberg, October 14, 2026
The EU is negotiating a mutual sanction relief agreement with Beijing to lift Chinese restrictions on ASML supplier Sindlhauser Materials GmbH in exchange for removing EU trade measures against a Chinese firm linked to Russia's war effort.
Chinese vice premier meets French president's diplomatic adviser
Xinhua,
Ambassade
de France en Chine, October 14, 2026
During talks in Beijing, Chinese Vice Premier He Lifeng and French Diplomatic Adviser Emmanuel Bonne expressed mutual commitment to expanding bilateral economic cooperation and stabilising EU-China trade relations through continued dialogue.
France drops opposition to UK being included in ‘Made in Europe’
legislation
The Guardian, October 15, 2026
France and Germany have proposed allowing the UK to be included in the EU's "Made in Europe" automotive legislation, provided the British government aligns fully with the bloc's trade defence measures against Chinese electric vehicles.
China ready to cooperate with EU in tackling global imbalances
Reuters, October 16, 2026
During a meeting with key European financial officials, China's finance minister called for open macroeconomic coordination to address trade imbalances.
France, Germany confirm ‘made in Europe’ deal as China eyes to
flood EU with EVs
Firstpost, October 16, 2026
France and Germany have proposed a joint initiative linking public subsidies and procurement to "Made in Europe" manufacturing requirements and relaxed carbon emissions targets to protect the region's automotive industry against expanding competition from Chinese electric vehicle manufacturers.
Chinese commerce ministry warns EU against seeking gains through
pressuring, urges joint efforts for stable trade ties
Global Times, October 16, 2026
Rejecting claims that EU pressure produced the hybrid vehicle agreement, China's Ministry of Commerce warned Brussels against expecting leverage through coercive measures and urged sincere dialogue to resolve trade differences.
GLOBAL GOVERNANCE AND REGIONAL ISSUES SELECTED BY THE ICES
EU and Turkey explore closer trade ties to reduce dependence on
China
euobserver, October 14, 2026
To address Turkey’s concerns over potential exclusion from supply chain and procurement schemes, Belgium's foreign minister urged the EU to deepen economic, trade, and defence partnerships with Ankara to reduce European strategic dependencies.
WHAT CAUGHT OUR EYE: CURRENT RESEARCH AND COMMENTS
After the loans, the contracts remain: China’s new Balkan model
MERICS, October 05, 2026
For Stefan Vladisavljev, China is adapting its Western Balkans strategy from direct lending to utilising European funds, concessions, and direct government agreements to maintain its long-term economic presence, requiring European institutions to enforce stringent transparency and competition standards to prevent publicly funding Chinese-built infrastructure.
China polishes a potent weapon for EU car wars
Reuters, October 06, 2026
According to Katrina Hamlin, China is considering phasing out export tax rebates for electric vehicles to shore up government finances, which would reduce carmakers' profit margins and potentially serve as a strategic bargaining chip to ease trade tensions with the European Union.
The only possible policy with China is to look them in the eye
EPP Group, October 10, 2026
Following a Foreign Affairs Committee vote, EPP Group MEPs urged the EU to adopt a firm, security-focused posture toward China that demands reciprocity, counters unfair trade, and conditions engagement on Beijing ending its support for Russia's war in Ukraine.
EU Hybrid Deal With China Welcomed, But Details Might Undermine
It
Forbes, October 10, 2026
Neil Winton argues that while the EU and China reached a partial interim agreement to halve projected Chinese hybrid vehicle imports and ease European market access and rare earth licensing, experts and industry groups note European divisions and potential room for continued import growth.
A first step, but no real rebalancing in the European Union’s
trade deal with China
Bruegel, October 12, 2026
Alicia García-Herrero reflects on the EU-China trade understanding: despite reaching minor trade understandings in Beijing, the European Union secured negligible concessions toward rebalancing its massive trade deficit with China, while Beijing successfully gained leverage on technology controls and potential delays to EU trade enforcement.
China and the EU could turn Morocco into a surprise global hub
for electric vehicles
The Conversation, October 12, 2026
Linda Calabrese and Jodie Keane make the case that despite the EU imposing tariffs on Chinese electric vehicles to protect its domestic auto industry, Chinese manufacturers are bypassing these duties and increasing European sales by expanding production in Morocco, leveraging the country's strategic location, critical mineral reserves, and free-trade status.
How Maroš Šefčovič talked his way to a China trade breakthrough
Politico, October 13, 2026
Camille Gijs and Carlo Martuscelli analyse Europe’s trade chief negotiations with China and conclude that by leveraging access to the open European market, EU trade chief Maroš Šefčovič secured a negotiated deal with Beijing to cap Chinese hybrid car imports at 350,000 vehicles annually, validating his strategy of engagement backed by the threat of tougher trade defences.
EVENTS
Over the past two weeks, the ICES has actively participated in a series of events. We are delighted to share some of our insights:
On 8 October 2026, Bruegel examined how Europe can counter trade coercion without undermining international rules. Speakers stressed reducing critical dependencies, strengthening competitiveness and coordinating with partners. They debated WTO reform, collective retaliation and smaller economies’ concerns, highlighting tensions between policy flexibility and preserving predictable, fair trade for all countries.
On 13 October 2026, Friends of Europe organised its Energy and Climate Summit, bringing together industry representatives, civil society members, European institutions and ministers to discuss the needs of an energy transition that should be both competitive and impactful.
During a session on Critical Raw Materials (CRMs), speakers including Bart Sap, Cillian Lohan, and Ke Wang discussed European policy strategies. Ke Wang noted that the European Union has generated 40% of all global CRM policies since 2020, while emphasising the inherent trade-offs between phasing out fossil fuels and avoiding concentrated clean energy supply chains. She also highlighted recycling research indicating that 40% of used electric vehicle batteries could be repurposed.
On 14 October 2026, the Wilfried Martens Centre for European Studies hosted an event for its book launch 'The European Peace: The Miracle, Its Causes, Its Limits' co-edited by Alain Lamassoure and Teona Lavrelashvili.
Participants comprised Herman van Rompuy, Alain Lamassoure, Teona Lavrelashvili, Mikuláš Dzurinda, Philippe Van Parijs and Peter Hefele. Discussing the conditions for European peace and stability, experts argued that sustaining regional order requires revitalising compromise, strengthening institutions, addressing economic trade-offs, and adapting to the weaponisation of economic interdependence.
On 14 October 2026, Politico hosted its European Resilience Summit.
Across the day’s different sessions and among guests, the consensus was that to build strategic resilience and global competitiveness across its financial, industrial, energy, digital, defence, and raw material sectors, Europe must streamline regulatory frameworks, integrate capital markets, de-risk key supply chains, and modernise governance mechanisms while balancing public protection with international open trade.
On 15 October 2026, EUISS examined Europe’s choices on Ukraine, enlargement and China. Speakers called for sustained aid to Ukraine, credible accession pathways and coordinated pressure on China, while warning that domestic political shifts, divisions among member states and critical supply dependencies could limit the EU’s ability to act collectively.
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Please note that all news and views cited in this bulletin, if not otherwise indicated, do not represent the position of ICES.