European Union leaders are increasingly alarmed by their economic dependence on China, with top diplomat Kaja Kallas comparing efforts to reduce reliance to a painful medical treatment. The bloc’s trade deficit with China has reached record levels, driven by a surge in electric vehicle imports. Brussels is debating how to respond to Beijing’s aggressive trade policies, as Chinese officials warn of retaliation against any protective measures.

Analysts and policymakers describe a growing sense of urgency within Europe’s industrial sectors, particularly in Germany, where manufacturers face mounting competition. France, Spain, and several other EU members have urged stronger action to defend strategic industries, while Beijing has denounced proposed EU policies such as the Industrial Accelerator Act as protectionist. China’s recent export restrictions on rare minerals and new regulatory powers over foreign-linked firms have further strained relations.

Upcoming G7 and EU summits are expected to address these tensions, with European officials seeking ways to rebalance trade without triggering a full-scale trade war. However, fears of Chinese retaliation and consumer dependence on low-cost imports complicate the path forward.