A typically routine forum for trade talks between China and the European Union this weekend becomes a high-stakes test of an economic relationship involving more than $900 billion in bilateral commerce.
That is because the EU’s ties with China are in a precarious state, and during high-level meetings over the coming days, the 27-nation bloc’s trade chief will tell Beijing concrete agreements are needed in an effort to reset the relationship. If not, things could get even worse.
The need to stabilize the relationship will be one of the main messages the EU’s Valdis Dombrovskis will bring during a four-day trip to China starting Friday, according to people familiar with the plans.
But a new EU anti-subsidy probe into Chinese electric vehicles — and the prospect of a potential tit-for-tat tariff war — will complicate his work.
The EU will use the opportunity to try to cool down some of the fallout from the EV investigation, the people said. Some businesses fear an outsize reaction from China that they worry could come in the form of its own tariffs or other trade curbs that could target industries beyond just cars.