The European Union is entering a critical phase in its economic relationship with China with a level of internal cohesion that has eluded it for years, according to Noah Barkin, senior adviser at Rhodium Group and author of the Watching China in Europe newsletter. The decisive variable, he argues, has been Germany's move toward a harder line on Beijing's trade practices.
Speaking on Special Report, Barkin said Berlin's recalibration has removed the most significant obstacle to a common European position. For much of the past decade, German industry's deep exposure to the Chinese market acted as a brake on Brussels' willingness to confront what European officials describe as a persistent and growing trade imbalance.
An October deadline and the limits of retaliation
The EU has set an October deadline for addressing its trade deficit with China, after which it has signalled that tougher measures could follow. The threat is not abstract: Brussels has already been moving toward a more assertive posture, as seen in the preliminary car trade deal that emerged from recent negotiations.
Barkin cautioned that Beijing retains what he called "retaliation dominance in the short term" — the capacity to inflict immediate pain on European exporters through targeted measures. But he argued that the EU's leverage is structural rather than tactical. Access to the single market remains one of the most valuable prizes in global trade, and European policymakers believe China is equally keen to avoid a full-blown escalation.
"The EU holds leverage through access to its single market, and China also wants to avoid escalation."
That calculation has shaped the current negotiating stance. Rather than seeking a rapid settlement, Brussels appears willing to let the deadline approach while it consolidates support among member states. The recent trade talks in Beijing involving Commissioner Maroš Šefčovič were a sign that both sides recognise the stakes, even if the gap remains wide.
From Berlin to Brussels: a shift with consequences
Germany's pivot is significant precisely because it is not a sudden rupture. The coalition government in Berlin has been under pressure from its own industrial base, which is confronting intensifying competition from Chinese electric vehicles and mounting concerns about supply-chain dependencies. That domestic pressure has gradually translated into a more receptive stance in Brussels.
The change matters beyond trade policy. A Germany willing to countenance tougher measures against China alters the balance in the European Council, where unanimity or near-unanimity is often required for significant action. It also strengthens the hand of member states such as France, which has long advocated for a more strategic approach to Beijing, and reduces the space for countries that prefer to keep economic relations insulated from political friction.
Barkin's assessment suggests that the EU's unity is not merely rhetorical. The question now is whether it can be sustained through the October deadline and beyond, particularly if Beijing responds with targeted retaliation against specific member states. That scenario would test whether European cohesion is durable or contingent on the absence of serious costs.
For now, the direction of travel is clear. The EU is preparing to use the tools at its disposal — from anti-dumping duties to procurement restrictions — with a level of coordination that would have been difficult to imagine only a few years ago. The broader agenda in Brussels remains crowded, but China trade has moved firmly toward the top of it.
What happens after October will depend on whether Beijing reads European unity as a negotiating position or a genuine shift. Barkin's analysis points to the former, but with an important caveat: the EU's internal consensus is now strong enough that even a tactical posture carries strategic weight.
