BRUSSELS, Oct 14 (Reuters) – European leaders gather in Brussels on Thursday to weigh up the future of trading ties with China, whose surging exports of cars and other manufactured goods are threatening to harm local industry and cause mass layoffs across Europe.
Other topics for the two-day meeting range from Ukraine – including US President Donald Trump’s diesel deal with Russia – to the Middle East, defence, migration, the EU’s long-term budget and moves to enlarge the 27-country bloc.
Make sense of global markets with the Trading Day newsletter. Sign up here.
For some, the summit may mark a welcome break from domestic troubles. French President Emmanuel Macron is facing student protests and sharp bond losses over a budget deadlock, German Chancellor Friedrich Merz is struggling to get his coalition on track after regional vote defeats, and Spanish Prime Minister Pedro Sanchez trails in polls before an election.
Across Europe, mainstream politicians are under pressure from far-right and nationalist parties buoyed by a sense among many voters that the economy is not generating enough wealth to fund the levels of public services they expect.
Twin challenges of cheap Chinese exports and higher US tariffs are putting further pressure on the region’s industrial base and leading in some cases to job losses – such as the 100,000 to go at Germany’s Volkswagen (VOWG.DE), opens new tab.
GROWING TRADE DEFICIT WITH CHINA
Against that backdrop, EU leaders will start on Thursday by discussing whether a preliminary deal sketched out with Beijing to stem a surge of hybrid car imports is a good enough first step to keep talking to China about a wider trade understanding, rather than envisaging tougher restrictions.
Franco-German proposals have already been presented for possible measures to rein in a goods deficit with China that hit €360 billion ($402 billion) last year and was already €200 billion in the first six months of 2026.
