European Union leaders have convened in Brussels for a two-day summit, with a focus on economic competitiveness and trade with China.
What happened
The EU has recently reached an agreement with China to moderate exports of hybrid and plug-in hybrid vehicles to the EU. China has also agreed to facilitate EU companies' applications for export licenses for rare earths and permanent magnets.
EU leaders are expected to discuss ways to respond to rising Chinese imports and high energy prices, which have put pressure on European manufacturers. The EU's trade deficit with China has increased significantly, reaching 103 billion euros in the second quarter of 2026.
The summit will also address the EU's budget for 2028-2034, with proposals for a budget of around 2 trillion euros. However, there are deep divisions among member states, with some arguing that the proposal is too large.
Support for Ukraine and discussions on the Middle East, including freedom of navigation and maritime security, are also on the agenda. EU leaders will review Ukraine's progress toward EU membership and consider progress toward Montenegro's accession.
