EU reasserts 'de-risking not decoupling' approach to China trade amid rising deficit (euobserver.com)

• EU Commission reasserts 'de-risking not decoupling' with China
• EU-China trade deficit reached €360bn in 2025
• China threatens retaliation against EU trade measures

"The European Commission reaffirmed its 'de-risking, not decoupling' strategy with China on 29 May 2026, describing Beijing as a critical partner but warning the trade relationship is unsustainable. The EU's trade deficit with China hit €360bn in 2025, and Brussels is considering an overcapacity instrument to cap Chinese exports. China has threatened resolute countermeasures. European industry associations are pushing for more aggressive use of the Foreign Subsidies Regulation and other trade defense tools. Previous talks on electric vehicles and rare earths have stalled."