Dear ICES friends,
We are delighted to present the latest issue of our biweekly 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
Brussels might have been paralysed by the heatwave that rolled across Western Europe in the
last two weeks, but that did not stop key meetings from taking place, such as the 18-19 June
European Council Summit and Chinese Minister of Commerce Wang Wentao's scheduled talk with
the Commission's trade chief Maroš Šefčovič in the Belgian capital.
This edition of the ICES Newsletter Bulletin thus takes a look at what every Europe-China observer
closely watched, namely, how European leaders agreed to position themselves towards China. In
perhaps classic Brussels' anticlimactic fashion, the bulk of that decision has been delayed to
October. But the main takeaway is that the Commission has been mandated with keeping communication
channels with China open, while still preparing new economic defence tools to address what is
seen in European circles as China's threat to the EU's industrial base. What is more, the EU
and China agreed to establish a consultation mechanism to avoid commercial tensions, the so-called
'Trade and Investment Consultation Mechanism.'
In the meantime, trade tensions between the two blocs continue to impact industries, from fears
of shortages following the announcement of power inverter bans to potential unaddressed dependencies
in the military across technologies, critical raw materials, and drones.
Nevertheless, one cannot ignore that some areas of cooperation remain, such as the EU-China
talks on plastic pollution, or the Ministerial on Climate action ahead of the COP, still going
ahead despite the USA's glaring absence. Furthermore, European media also noted that China still
depends on the EU for a variety of products and technologies, even if those dependencies are
shrinking.
Overall, and as Daniel Balazs summarises in his latest commentary, the EU's China policy seems
to be hampered by the divisions between member states and a lack of long-term vision on what
the strategy should be. Engagement between the two actors remains, as a result, fragmented and
often the victim of mixed signalling. Whether EU-China talks over the next three months will
make any change and find a new path is to be watched closely.
ICES wishes you a pleasant read of this edition!
NEWS ROUND
THE WEEKS' HIGHLIGHTS: PROGRESS AND PITFALLS
EU and China seek to head off trade war with new dialogue
Politico,
Reuters,
Commission and
Global Times,
June 29, 2026
China and the EU agreed to establish a consultation mechanism to avoid commercial tensions and to address the trade deficit issue, the so-called 'Trade and Investment Consultation Mechanism.' The EU's trade chief is due to visit China in October. Guo Jiakun, a spokesperson for China's Ministry of Foreign Affairs reaffirmed after Šefčovič's comment that the trade imbalance was becoming unsustainable that China and the EU are partners, not rivals.
Germany's Merz Seeks Currency Talks to Fix Undervalued Yuan
Bloomberg and
SCMP and
Global Times,
June 19, 2026
Friedrich Merz, Germany's Chancellor denounced what he sees as an undervalued Chinese currency by 30 percent, saying that China was 'flooding markets' with subsidies and overcapacity, thereby using a more forceful tone towards Beijing than usual. A Global Times Editorial reacted by saying that 'the world does not need a new "Plaza Accord."'
EU-CHINA RELATIONS
China dismisses EU claims of military training for Russian troops
CGTN,
June 16, 2026
China on Tuesday rejected allegations from the European Union's top diplomat that Beijing may have trained Russian military personnel now fighting in Ukraine, calling the accusations 'groundless' and a 'pure smear.'
Germany backs French push for US-style tariffs and quotas
Financial Times,
June 17, 2026
According to the Financial Times, Germany is now supporting a French proposal that would empower the EU to impose tariffs more quickly on China, similarly to American recent measures using the US's Section 301 tool.
Commission tees up China clash at EU summit
Euractiv,
June 17, 2026
Ahead of the European Council's summit of the 18-19 June meant to address the recent trade tensions with China, Maroš Šefčovič, the Commission's trade chief announced that 'We will push for more reciprocity,' referring to what he labelled as the 'unsustainable growing trade deficit' with China.
How does the EU protect itself from Chinese trade dominance?
Reuters,
June 18, 2026
The EU current tools to protect itself from perceived market distortions include anti-dumping/anti-subsidy duties, safeguards, the anti-coercion instrument (also nicknamed "trade bazooka"), the international procurement instrument and the foreign subsidies regulation. To this list could be added a diversification tool, additional quotas and duties.
EU prepares tariffs on Chinese plug-in hybrids, Handelsblatt reports
Reuters,
June 19, 2026
The Commission could soon be imposing countervailing duties on hybrid cars coming from China, as reported by Handelsblatt.
EU Commission to develop diversification instrument, von der Leyen says
EuroNews,
June 19, 2026
The President of the European Commission, Ursula von der Leyen told reporters that the EU would develop new trade defence tools, which would include a diversification one.
EU delays trade confrontation with China
Financial Times,
June 19, 2026
While the rhetoric surrounding China had escalated over the last few weeks, the European leaders encouraged dialogue rather than a forceful response at the European Council, but still entrusted the Commission to 'develop and eventually complement the toolbox in the area of trade defence and industrial policy.'
EU's Industrial Accelerator Act risks 'counterproductive effects,' China Chamber of Commerce to EU warns in formal feedback to EC
Global Times,
June 20, 2026
China's business chamber in the EU submitted feedback to the European Commission on the bloc's proposed Industrial Accelerator Act (IAA), expressing concerns over provisions related to public procurement restrictions, foreign investment conditions, and legal uncertainty.
Why a Chinese renewables giant is pondering a majority localisation in Europe
SCMP,
June 22, 2026
In order to stay on the European market, the Chinese energy company Envision will try to source 'more than half its supply chain locally for the European market' as Brussels decided on a Chinese inverters' ban in EU-funded renewable projects.
Austrian Foreign Minister visits China, seen as boost to pragmatic EU China policy, expert says
Global Times,
June 22, 2026
Chinese Foreign Ministry spokesperson Guo Jiakun said on 18 June, that China stands ready to have closer exchanges, build up consensus and carry forward the friendship with Austria for greater progress in developing the friendly strategic partnership.
EU's phase-out of China-made inverters gets a reality check
Euronews,
June 22, 2026
The European Commission is exploring through consultation and meetings whether its phase-out of China-made power inverters is feasible in the near future without triggering massive short-term shocks to the industry.
As Europe rearms, can it decouple its military supply chains from China?
SCMP,
June 22, 2026
While European leaders are calling for overall de-risking of their industries from China, the current dependencies in the military to the Asian nation when it comes to electronics, drones, rare earths and critical materials will make the changes to supply chains a long and arduous process.
EU-China EV Tariff War Escalates: Brussels Confirms 17-38% Duties on Chinese Electric Cars
London Daily News,
June 23, 2026
Tariffs on Chinese-made electric vehicles have been confirmed by the EU at a rate ranging from 17% to 38%, illustrating the continued tense trade environment between the two blocs.
China outpacing Europe in drug innovation and development, Pfizer executive says
Reuters,
June 23, 2026
According to a Pfizer executive, '40% of all clinical studies in oncology in the world are in China' and clinical development could supposedly be conducted there three times faster than in Europe for half the price.
EU's Šefčovič going into China trade talks hobbled by European leaders' flip-flopping
euobserver,
June 26, 2026
Before the 29 June meeting between Chinese commerce minister Wang Wentao and EU trade commissioner Maroš Šefčovič in Brussels, the latter saw its negotiating mandate complicated by the back and forth and divisions within the EU member states when it comes to the stance to take towards China.
As Europe sizzles amid an extreme heatwave, the hunt for China's air con remains elusive
South China Morning Post,
June 28, 2026
The heatwave that paralysed Western and Northern Europe had the citizens in the countries suffering from it ordering millions of AC units from China to the point where the offer could not match the demand.
Jeep plans six-model range in Europe by 2030, including China-built large SUV
Reuters,
June 29, 2026
The Jeep branch of the Stellantis brand is due to partner with Dongfeng to build a SUV in China, to be sold there and in Europe.
EU rare earth imports surge in 2025, but China leads the supply chain
The Brussels Times,
June 29, 2026
EU imports of rare earths climbed by 17.1% to 15,100 tonnes and exports were raised by 21.1% in 2025, and China is still the lead supplier: it represented 46.8% of the EU's imports, followed by Russia with 25.9% and Malaysia with 23.1%.
GLOBAL GOVERNANCE AND REGIONAL ISSUES SELECTED BY THE ICES
Climate cooperation must go on despite US absence, Chinese minister says
euronews,
June 22, 2026
The EU, China and Canada met at the annual 'Ministerial on Climate Action' and reaffirmed their commitment to international climate accords, despite the absence of the USA, as underlined by the Minister for Ecology and Environment in China Huang Runqiu.
EU-China talks highlight urgency for global plastics treaty amid rising pollution
The Brussels Times,
June 24, 2026
EU environment commissioner Jessika Roswall met with China's ecology and environment minister Huang Runqiu for the 11th EU-China Environment Policy Dialogue, discussing the need for a Global Plastics Treaty and an 'international legally binding instrument to tackle rising plastic pollution.'
EU signs US 'Pax Silica' initiative singling-out China on AI chips
Euractiv,
June 24, 2026
The European Commission signed the Pax Silica initiative led by the USA, meant to remove China from semiconductor used for artificial intelligence supply chains. The non-binding declaration is not yet clear on what this will entail.
WHAT CAUGHT OUR EYE AND ICES CONTRIBUTIONS: CURRENT RESEARCH AND COMMENTS
The art of the swarm: Systemic rivalry with China on European terms
ECFR,
June 17, 2026
Andrew Small writes about what he thinks should be the EU's strategy when it comes to China: adapting the trade defence toolkit of the bloc, and in the meantime, using the existing measures in a 'swarm' fashion to not trigger retaliation from Beijing while still protecting the single market and the EU's industrial base.
The mandate on China is clear, but can Europe compete rather than just protect?
Euractiv,
June 22, 2026
Alicia García Herrero argues that while the Commission's mandate from the Council to develop concrete tools to protect the EU's economy from what it sees as China's unfair competition and industrial overcapacity, that current support might erode once said tools are proposed at the end of summer, and that the EU needs to boost its own competitiveness and innovation massively, not just shield them.
Stack battles: the US-China artificial-intelligence rivalry is moving beyond chips alone
Bruegel,
June 22, 2026
Alicia García-Herrero and Bertin Martens make the case that China is now moving up the competition scale on AI, which so far has been led by the USA thanks to a combination of hardware, software but also overall integrated ecosystems and proprietary software that reinforce the dominance of companies like Nvidia. Huawei is now closing up that gap by lowering the barrier to entry for developers used to Nvidia ecosystems and making it open-source to compete with the proprietary nature of the American company.
The Structural Limits of the EU's China Policy
The Diplomat,
June 23, 2026
Daniel Balazs of ICES analyses the output of the European Council meeting on 18-19 June. According to him, the summit failed to establish a unified or predictable strategic framework for this approach. With key member states still divided between hawkish and dovish positions, the EU's mixed signals continue to hinder the strategic trust required to secure meaningful economic compromises with China.
How China's currency makes the EU's trade deficit worse – and what Brussels can do
Euronews,
June 23, 2026
Peggy Corlin reflects on China's currency and its undervaluation according to EU leaders, as the German Chancellor underlined that an 'artificially low currency is an advantage for those who want to improve their economic competition positions.'
China and the US, accidental climate saviours of the world
Financial Times,
June 23, 2026
Alan Beattie comments on the very limited success of what economists thought would be the key factor in fighting the negative externalities of climate change: carbon pricing. Instead, unexpected factors such as China's massive production of green technology as part of its national security strategy, coupled with the Iran war launched by the USA have both increased global demand for green tech.
The rollercoaster of EU-China relations is now heading decisively downhill
Substack,
June 24, 2026
Alicia García-Herrero analyses the latest European Council summit's decisions as a clear signal that the EU-China relation is fast degrading but that the 'rollercoaster has not yet reached the bottom.'
EU and China need a grand bargain to avoid a trade war
SCMP,
June 24, 2026
Yan Shaohua opines that China and the EU would benefit from a pact acknowledging the new economic reality, one that would allow for two-way investments. For the author, this might be the only way to 'pull back from the brink' and move 'beyond short-term political posturing.'
China sets out its vision for a new global order – but will it commit the resources to match its ambition?
Chatham House,
June 24, 2026
Yu Jie takes a look at China's new paper on global governance, which advocates for a more multipolar order, calls for the UN to remain the centre of gravity of international governance and for the Global South to have greater participation and weight in global affairs. She however notes that contrary to past efforts by superpowers like the US to influence the international order, China does not seem willing to dedicate much financing to the reshaping of the institutional architecture of such order.
Europe depends on China. Here's where China still depends on Europe — more than you'd think
Euronews,
June 26, 2026
Peggy Corlin lists out the domains where China still relies on the EU for key technologies, despite recent efforts by the Asian nation to reduce its own dependencies. These include extreme ultraviolet lithography machines used for manufacturing advanced semiconductors, aerospace with passenger jets parts made in Europe, pharma and biotechnology patents, automotive chips, as well as robotics and quantum.
The essence of Europe's trade deficit with China, as seen through an air conditioner
Global Times,
June 27, 2026
As the heatwave rolled over Europe, the number of heat-related deaths has risen around 15,000. Europeans rushed to get air conditioners, noting that affordable ones are often Chinese-made. For the Global Times Team, this reflects a simple reality: China allows Europe to get access to fair-priced goods needed for its consumers and the current trade tensions are an impediment to the laws of the free market.
China isn't Europe's real problem
SCMP,
June 28, 2026
Sebastian Contin Trillo-Figueroa points out some of the incoherent elements in Europe's narrative about China, namely the focus on market distortion, subsidies and overcapacity, rather than looking at its own domestic issues of competitiveness and lack of economic growth.
China understands food security — the EU does not
Euronews,
June 29, 2026
Nico Muzi explains how the meat industrial complex in both China and Europe are highly dependent on high protein animal feed. However, China is already moving towards biomanufacturing and cultivated meat from cells, when the EU has been slow to invest in such technology, which could eventually threaten Europe's food security if new global shocks were to disrupt high protein animal feed supply chains.
EU–China relations at a crossroads, Vol. V: The geometry of coexistence
EPC,
June 30, 2026
Ivano di Carlo presents the fifth volume of the EU-China relations compendium, looking at the uneasy co-existence relationship that developed between the EU and China, with all which that entails in escalation, engagement and lack thereof, cooperation, competition, and the necessity for institutional partnerships and dialogue in these troubled times.
Fragmented Europe: Dealing with China as a technology and innovation power
MERICS,
June 30, 2026
MERICS published its 2026 report for the European Think Tank Network on China, looking at the Asian nation's recent strides in science, technology and innovation, its opportunities for research and cooperation, and the competition it creates for industrial high-tech sectors and European actors.
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 19 June 2026, the European Policy Centre (EPC) hosted a roundtable on 'AI governance beyond "agree to disagree"' exploring avenues for cooperation between the EU and China. The discussion contrasted the EU's horizontal, risk-based AI Act with China's agile, scenario-based approach. While some Western discourse labels digital regulation as an obstacle to economic growth, participants argued that smart regulation serves as vital infrastructure. By steering development rather than stifling it, targeted regulation can cultivate superior, safer products, mirroring historical safety successes in the international automotive industry.
On 22 June 2026, the EPC hosted a webinar titled 'Will the June EU Summit Provide Strategic Direction?' The webinar concluded that EU leaders did not provide the strategic direction needed at a moment of deep geopolitical and economic uncertainty. Rather than marking a turning point, the summit was described as an ordinary June meeting that largely postponed difficult decisions until later in the year.
On 22 June 2026, the Institute for China-Europe Studies (ICES) convened a roundtable on EU-China relations. The discussion boiled down to 6 main areas and ideas that could inform prospective EU-China interactions:
- The imperative of creating new political narratives for the EU-China relationship
- Adopt a comprehensive, flexible negotiation approach in EU-China engagement
- Establish more frequent, inclusive, and technically grounded communication channels
- Regional and sector-based cooperation could help build trust from the ground up
- Use more incentives rather than only restrictive measures
- Prevent trade and regulatory tensions from becoming a wider political conflict
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Thank you for being a part of our newsletter community! We appreciate your continued support and engagement. Stay tuned for more exciting updates in our upcoming editions. If you have any suggestions or feedback, we would love to hear from you.
Please note that all news and views cited in this bulletin, if not otherwise indicated, do not represent the position of ICES.