EU leaders to tackle China exports, energy prices, budget at summit

European Union leaders began a packed summit on Thursday to debate how to curb surging exports from China blamed by industry groups for factory closures, tackle high energy prices and bridge wide differences over the future EU budget. The leaders from the EU's 27 members meet less than a week after the European Commission secured ‌an agreement with Beijing to limit imports of hybrid cars from China.

It is a first step in what the EU hopes will be a broader effort to reduce the bloc's goods trade deficit with China that hit €360 billion ($400 billion) in 2025 and is on course to surpass that level this year. Draft conclusions from the summit indicate leaders want the Commission to continue its dialogue with Beijing, while also making full use of EU trade defence measures and ‌adding new trade instruments to protect the bloc further.

"These imbalances are not limited to one sector. We don't have much time because every month that goes by, thousands of jobs are lost," said a senior ‌EU diplomat, who briefed reporters on condition that the official's country was not identified. The bloc grapples with rising economic anxiety, which far-right parties are capitalising on in elections. The hybrid cars deal was a first step, but the broader imbalance — spanning chemicals, steel and machinery — remains unresolved.

Beijing has said that hyping up the issue of economic imbalances is an excuse to promote protectionism and exert pressure on and restrict China. GERMANY'S U-TURN ON CHINA IMPORTS

Franco-German proposals released last week are likely to be the focus of discussions. The EU's two largest economies ⁠said there was an ​urgent need for measures to deal with imports of chemicals ⁠and PET — the plastic widely used in packaging — and called for measures to retaliate quickly against countries that harm the bloc. The paper marks a sharp turn for Germany, which only two years ago was the most vocal critic of EU anti-subsidy tariffs on Chinese electric ⁠vehicles.

The summit is set to kick off with a debate about EU competitiveness, of which relations with China are part. Several EU countries have also put high energy prices on the agenda, which the draft conclusions call an issue of "critical importance." The conclusions point ​to proposals already made by the European Commission, such as a one-year delay to the EU's methane emissions rules for oil and gas imports, and ask the EU executive to come up with ⁠further short-term measures.

Another area of contention is the wish by countries including the Czech Republic and Italy to weaken or suspend the EU Emissions Trading System, a regulation forcing power plants and industries to buy CO2 permits when they pollute. The prime ministers of Finland, Sweden and Denmark ⁠hit ​back in a letter praising the system as a driver of energy security by helping Europe reduce reliance on imported fossil fuels. They warned "any weakening" would hinder investment in clean industries.

EU leaders will also on Thursday discuss the bloc's next seven-year budget, which requires unanimous approval and often leads to divisive negotiations between net contributors and net recipients. The 2028-2034 budget is no different, with a special summit set for late November to try to ⁠reach agreement. One of Friday's main topics will be the challenges facing Ukraine, with President Volodymyr Zelenskiy due to attend. Leaders are likely to discuss Ukraine's funding needs for 2027. Leaders will also likely express regret over ⁠the US decision to temporarily lift sanctions on Russian diesel.

"I ⁠call upon all the European leaders to do more financially, militarily and non-military, because a lot of European countries are lagging behind in the support of Ukraine," Dutch Prime Minister Rob Jetten told reporters. "Let's step up our game and make sure that they can win this senseless war."

($1 = 0.8991 euro)