From Cognac to Electric Vehicles: Strategic Disenchantment in the Europe–China Trade Relationship • Dr. Arnaud Leveau
Dr. Arnaud Leveau, president of Asia Centre, offers an analysis of the Strategic Disenchantment in the Europe–China trade relationship, following the Cognac and Electric Vehicles cases.
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the Europe–China Trade Relationship – Full Text by Dr. Arnaud
In early July 2025, China’s decision to exempt major French Cognac producers from anti-dumping duties was interpreted by some as a diplomatic gesture. However, this selective exemption should not be mistaken for de-escalation. Instead, it illustrates the deepening asymmetry between a strategically coherent Chinese use of economic levers and a European Union still fragmented in its trade and geopolitical posture.
Rather than being an isolated development, the Cognac affair must be understood as part of a broader Chinese strategy of calibrated economic coercion—offering selective relief to divide member states while intensifying pressure on others. This underscores the vulnerabilities created by Europe’s fragmented response capabilities and its uneven exposure to external economic pressure.
More fundamentally, this episode reveals the limits of the EU’s current approach to strategic autonomy. While the concept has been central to the Union’s external action strategy since 2020—particularly in the areas of digital sovereignty, energy, and defence—its economic dimension remains underdeveloped and inconsistently applied. The absence of a unified response to coercive tactics, such as China’s retaliatory tariffs, weakens the EU’s credibility as a geopolitical actor and undermines its own declared goals of becoming a strategic sovereign power.
In this brief, Dr. Arnaud Leveau analyses the structural shifts defining the EU–China relationship, with a focus on regulatory asymmetry, bilateral fragmentation, and national divergences—particularly between France and Germany. He calls for a clearer articulation of EU strategic autonomy in trade and investment policy, operationalised through enforceable instruments, rapid response mechanisms, and a better-aligned Franco-German engine.
As the EU–China Summit in July 2025 approaches, the brief urges European leaders to move beyond declaratory diplomacy and confront the systemic nature of economic rivalry. Achieving true strategic autonomy means transforming Europe’s rhetoric into a credible architecture of resilience, reciprocity, and unity.