EU ministers said in Dublin on Friday that the European Union should strike deals with Beijing to curb imports in sectors such as chemicals, machinery and pharmaceuticals, as the bloc faces what ministers described as an unsustainable and damaging goods trade deficit with China, Reuters reported.

The EU's goods trade deficit with China swelled to more than €370 billion in 2025 and is on course to break well past €400 billion this year, a situation European Commission President Ursula von der Leyen has called unsustainable. Yaani, the deficit is running at more than €1 billion — about 100 crore euro — every single day.

European Trade Commissioner Maros Sefcovic earlier this month agreed with Beijing for the EU to cut imports of hybrid vehicles from China by more than half, to address the deficit and support Europe's struggling carmakers, Reuters reported. Irish Foreign Minister Helen McEntee told reporters that dialogue with China could be a stepping stone to look to more industries and sectors where the imbalance can be addressed.

What is 'China Shock 2.0'?

European industry says a surge of relatively cheap, state-subsidised Chinese goods — dubbed China Shock 2.0 — is already causing factory closures and job losses, most notably the 100,000 positions set to go at Volkswagen. Von der Leyen said this week there were growing concerns for chemicals and machinery, and Lithuania's Foreign Minister Kestutis Budrys said on Friday that pharmaceuticals could also be included.

China has said in the past that it is not the root cause of the EU's problems, but a partner in solving them. Ministers did not go into potential short-term measures the EU could take in parallel to discussions with Beijing, Reuters reported.