Written by Anna Flynn.
The EU and China account for nearly 30 % of global trade. The EU has defined China as a ‘partner, competitor, and systemic rival.’
One of the key, current challenges is that, following the announcement of United States’ tariffs, China announced new export controls on their rare earth elements in April and October 2025. A second package was suspended until November 2026.
At the 25th EU-China Summit in Beijing, marking 50 years of diplomatic relations, the partners discussed trade, climate change, and Russia, against an ongoing backdrop of huge geopolitical shifts.
During the July 2025 summit, the EU urged China to lift its restrictions. China’s rare earth elements are difficult to source elsewhere, and simultaneously play an imperative role in the EU’s digital, defence, and green industries. According to the European Central Bank, 80 % of European firms are three intermediaries away from rare earth element producers; highlighting the value of these materials to the EU economy.
The EU’s plan to address this vulnerable, yet vital supply, is the Critical Raw Materials Act. The aim of this regulation (among other things) is to diversify the EU’s imports, support strategic projects, and strengthen EU monitoring of supply risks.
In July 2025, Parliament adopted a resolution urging the Commission to speed up the process of implementing the Critical Raw Materials Act, condemning China’s actions as unjustified and coercive.
Moreover, The EU’s trade deficit with China (€308.4 billion in 2024), is expected to rise.
Meanwhile, China’s relationship with Latin America and the Caribbean (LAC) is growing, in direct competition with the EU’s objective to diversify critical raw material sources. Latin America produces large amounts of lithium and copper. By 2030, the EU’s demand for lithium is expected to increase 12-fold. Chinese companies have purchased half of the world’s largest lithium mines, and China is Latin America’s second largest trading partner today.
Nevertheless, in a joint statement following the EU-China summit, both parties reiterated that major economies should bolster climate efforts. They agreed to cooperate and lead a green transition.
A couple of months afterwards, ahead of COP30, China submitted its nationally determined contribution (NDC), or climate targets, for 2035. China’s share of global emissions increased from 9 % in 1990 to 17 % in 2024, and this is the first time that it has agreed to an absolute greenhouse gas emissions reduction.
An additional source of contention is China’s involvement with Russia’s ongoing war in Ukraine. At the summit, the EU stressed China’s responsibility to uphold world order and to refrain from supporting Russia’s military agenda. At the end of October 2025, the EU’s 19th package of sanctions was adopted against Russia, including sanctions on 12 entities located in China that are supporting Russia’s military and industrial complex.
This bilateral relationship will continue to carry far-reaching importance.
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