China presses the EU to lift chipmaking-machine curbs in talks over a 360bn-euro surplus

So far the chip machines are in these talks because Beijing put them there. China is pushing for the EU to stop blocking its imports of advanced chipmaking machines, restrictions imposed on national security grounds at Washington's behest, ABC News reported ^[5]. The report did not include any EU response to that request. Sefcovic faces a plain trade-off. Easing the curbs might buy movement on a surplus that hit 360bn euros last year ^[4]. The cost would be loosening a security control set at the request of the US, in the middle of a trade negotiation ^[5].

The gap those machines would be traded against is wide, and EU statistics show it widening. In the April-July period the EU bought 153.63bn euros of Chinese goods and sold 50.3bn euros back, for a deficit of 103.34bn euros ^[13]. That is about three euros of imports for every euro of exports ^[14]. On the report's dollar conversion, the EU imbalance is roughly a third of China's $1.2tn global surplus in 2025 ^[15].

Rebalancing measures are in force on both sides whatever comes out of the two days in Beijing ^[1]. The EU has moved to limit imports of Chinese electric vehicles and EV batteries, enacted protections for its steel industry and is limiting duty-free imports of small e-commerce parcels, a step aimed at Chinese fast-fashion firms ^[8]. China launched an anti-dumping investigation last week into EU imports of p-nitrotoluene, an input for dyes and pharmaceuticals ^[9]. Reports that some EU members want new measures to protect local industries have also drawn concern from Chinese officials and businesses ^[10].

Beijing's case against more of this came from its Commerce Ministry, which urged the EU earlier in the week to avoid protectionist measures and warned that they could backfire ^[7]. The EU's limits were already in place when that warning came ^[8]. China's probe into an EU chemical shows what backfiring looks like for an EU exporter ^[9].

The deadline is a question for this quarter. Sefcovic said this week's talks were the culmination of three months of intensive work, and he had set an October deadline for meaningful results on rebalancing ^[6]. He said it was crucial that the negotiations deliver "tangible outcomes" ^[3]. ABC News judged it unclear whether the two sides would find the will to resolve the factors behind China's growing surplus ^[2].

The pressure behind the surplus runs longer than any deadline. Worries over surging Chinese exports to Europe have deepened as the US raised tariffs to cut its own deficit with Beijing, especially since Donald Trump returned to the White House ^[11]. China's global surplus is forecast to top $1tn again this year ^[12].

I think the measures already in force are the planning baseline for EU-China supply chains this quarter, whichever way the talks end ^[8]. A result that touches the chip curbs would be a decision about alignment with Washington as much as about trade ^[5]. A missed October deadline would, in my view, strengthen the member states already pushing for new protections when they make their case next quarter ^[10].