EU leaders to ‘urgently’ call for new trade weapons to tackle China shock

Leaders of the EU’s 27 member states will instruct Brussels to “urgently” come up with new weapons to counter the imbalances they believe are caused by China’s economic policies, at a meeting in the Belgian capital on Thursday.

The instruction – part of a draft statement being negotiated ahead of this week’s European Council summit – comes after the European Union and China reached a surprise deal in Beijing last week that will cap the number of Chinese hybrid cars imported to the bloc at 350,000 per year.

While the deal dampened the immediate threat of a trade war, officials and diplomats in Brussels made clear on Wednesday that it was not enough and that the EU intends to keep the pressure on China to moderate its exports in other sectors.

“One swallow does not make a summer, but it’s a first result and the start of a process to get China to moderate its exports,” said a senior diplomat, speaking on condition of anonymity.