EU leaders back 'kill switch' to block Chinese imports as trade gap hits €360 billion

Ursula von der Leyen, the European Commission president, put the trade imbalance with China at the centre of her State of the Union speech in early September. “Our companies do not compete on a level playing field. It leads to deindustrialisation in the industrial heartlands of Europe. This is unsustainable.”

EU national leaders meeting in Brussels on Thursday in mid-October 2026 signalled support for developing a trade “kill switch” that could potentially block Chinese imports. They were told the Commission was open to a new instrument that could quickly eject Chinese companies from the EU market.

The pressure behind that discussion is the EU’s record goods trade deficit with China, which rose from approximately €304.5 billion in 2024 to approximately €360 billion in 2025, an increase of 18%. The gap runs at more than 1 billion euros a day.

In 2025, the EU imported €559.4 billion in goods from China and exported €199.6 billion in return. Cars have become a prominent part of the imbalance. The EU imported more than 1 million Chinese-made cars worth approximately €13.7 billion in 2025, with import volumes up 30 percent on 2024.

Chinese hybrid car exports to the EU rose from approximately 3,800 in October 2024 to approximately 50,000 monthly in 2026.

The trade dispute has already reached into chemicals and plastics. China opened an anti-dumping probe into EU chemical imports on Saturday (3 October 2026), concerning p-nitrotoluene, a chemical used in dyes, medicines and pesticides. The EU had opened a probe into Chinese PVC plastic imports in September 2026.

Sefcovic, the EU trade commissioner, began talks in Beijing on Thursday (8 October 2026). Wang Wentao, the Chinese trade negotiator, took part in discussions that continued through 9 October 2026.

EU leaders have given China a mid-October deadline to provide ways to reduce its trade advantage over Europe. If China does not meet it, the Commission will make unilateral moves to limit Chinese goods, including specific limits on electric vehicle imports and tariffs on other industrial goods.