BRUSSELS / BEIJING, July 1 — China and the European Union earlier this week formally inaugurated a ministerial-level Trade and Investment Consultation Mechanism (TICM) and released their first joint statement since 2019, opening a new institutional channel for managing a rapidly widening list of bilateral economic disputes.
Chinese Commerce Minister Wang Wentao and European Commissioner for Trade and Economic Security Maros Sefcovic co-chaired the inaugural meeting on Monday, June 29, at EU headquarters in Brussels, according to a statement posted on the Ministry of Commerce website. The two sides agreed to organize the new mechanism around four work tracks — trade and investment rebalancing, export controls, intellectual property, and World Trade Organization reform — with a joint monitoring system attached to track bilateral commerce in close to real time.
Both delegations agreed to convene the next ministerial-level session in the autumn of 2026 and instructed their respective working teams to deliver tangible progress before then. Speaking to reporters after the meeting, Sefcovic said the European side was confident that practical results could be achieved within three months on at least some of the dossiers under discussion.
The launch of the mechanism comes against a backdrop of sharply escalating frictions that culminated today. EU statistics cited during the preparatory phase show that the bloc’s goods trade deficit with China reached roughly €98 billion in the first quarter of 2026, the widest quarterly gap since the third quarter of 2022. For full-year 2025, the deficit climbed about 15 percent from a year earlier to around €360 billion. European Council President Antonio Costa has described the average daily imbalance, which works out to roughly €1 billion, as unsustainable in its current form.
As of today, July 1, Brussels has officially rolled out a series of trade-defense measures that have deeply unsettled Chinese officials. New steel safeguard rules that came into force today will cut China’s duty-free quota by approximately 47 percent compared with 2024 and double the over-quota tariff to 50 percent. Also effective today, the EU’s exemption from customs duties on imported parcels valued at €150 or less has been removed and replaced with a uniform charge on low-value imports. Separately, the European Commission announced in May that EU-managed public funds may no longer flow to renewable-energy projects relying on Chinese-made inverters, citing cybersecurity concerns.
Wang used the Brussels meeting to express formal objections to the inverter financing ban, a draft revision of the EU’s Cybersecurity Act, and a proposed Industrial Accelerator Act. He told his counterpart that the recent slate of restrictive instruments was disrupting normal commercial exchanges and the stability of global supply chains, and urged Brussels to weigh the overall importance of the relationship rather than allowing individual cases to escalate into systemic confrontation. According to the Chinese readout, Wang said that China was not the source of the difficulties facing Europe but rather a partner with whom solutions could be found.
Sefcovic, for his part, told the meeting that China remained a critical economic partner for the European Union and that the bloc had no interest in widening trade frictions. He said the EU’s focus was on rebalancing the relationship, expanding European exports to the Chinese market and managing differences through dialogue. The joint statement described the discussions as comprehensive, in-depth and constructive.
A specific element drawing close attention was the language on export controls, particularly those affecting rare earths and other critical raw materials. The joint statement noted that prior technical dialogue on the topic had already produced positive results and committed both sides to deepening that exchange and to introducing further facilitation measures aimed at stabilizing global supply chains. European industrial groups have warned in recent weeks that downstream manufacturers, including in the automotive and renewable-energy sectors, have begun trimming output as inventories of Chinese rare-earth processed materials have run down.
The joint monitoring system established under the new mechanism is intended to allow both sides to exchange granular trade data, observe shifts in trade flows and conduct technical work to improve transparency. The two delegations also exchanged lists of market-access concerns and pledged to continue substantive talks on tariff and non-tariff measures under the rebalancing track. On intellectual property, both sides reaffirmed that the existing IP Working Group would remain the primary technical channel for discussing systemic enforcement and protection issues. On the WTO, they undertook to strengthen coordination on the broader effort to reform the multilateral trading system and bolster its authority.
The meeting in Brussels was preceded by a separate bilateral session on June 28 between Wang and Germany’s federal economics and energy minister. The two governments agreed to relaunch the China-Germany Economic Cooperation Joint Committee, establish working groups on trade and investment as well as industrial cooperation, and immediately begin technical-level consultations on export controls. EU member states have shown visibly different appetites for confrontation with Beijing, with France pressing for tougher trade-defense measures and Germany, Spain and others urging caution. At the European Council summit on June 19, the 27 governments discussed competitiveness, supply chain resilience and macroeconomic imbalances but did not agree on new trade actions targeting China and did not name the country in their formal conclusions.
Officials on both sides described the establishment of the TICM as a procedural step rather than a breakthrough on substance. Whether the autumn meeting produces concrete deliverables on rare-earth licensing, EU restrictive measures, market access or the WTO agenda is expected to shape the trajectory of the relationship for the rest of the year.
