The European Union and China are in talks regarding the removal of EU tariffs on Chinese electric car imports.
The European Commission has expressed its openness to negotiate alternatives to tariffs with China, indicating a preference for a minimum price arrangement.
Opening From Brussels
What we’ve seen so far is a quiet yet clear opening from Brussels toward a more flexible arrangement. The Commission’s willingness to explore a price floor, instead of blunt tariffs, represents an attempt at managing trade concerns without flaring broader tensions. While the move may appear cooperative on the surface, it’s a response to mounting internal pressure. Several EU member states are becoming wary of a full-blown trade dispute, particularly one that could spill over into unrelated sectors.
Beijing, for its part, is likely weighing the long-term impact of any concession. Agreeing to a fixed minimum export price would soften immediate friction but may also pose challenges for its fast-expanding domestic manufacturers. The underlying worry on both sides is market imbalance. Europe fears a flood of underpriced imports that could destabilise its automobile industry, while China seeks to protect the gains it has made in new energy technology exports.
Von der Leyen’s administration has so far tried to walk a fine line—shielding internal interests without triggering retaliatory actions. There’s no guarantee talks will result in any firm outcome before year-end, but delays themselves can be telling. The period ahead will likely introduce more speculation regarding informal quotas or export controls.
Prices are now more than just a function of supply and demand—they are becoming political. With such uncertainty, we have to treat volatility not only as likely but as near-inevitable. In times like these, we should remain more sensitive to cross-border headlines than to technical patterns. When trade talk shifts, as it may well do with little warning, it tends to do so in waves.
Navigating Market Moves
For those of us watching spreads and price fluctuations, it’s worth noting that short-term moves may not always be based on market fundamentals. They can respond to tone and timing of public statements. Softening rhetoric may trigger relief rallies that are sharp but short-lived. Any suggestion of breakdown in talks, even speculative, might heighten risk premiums overnight.
We should therefore anticipate that news-driven adjustments could overtake economic indicators in shaping price action. In this context, positions held over weekends or during public holidays carry elevated exposure. It becomes less about what the data says and more about who speaks and when.
Adjustments in exposure levels and calendar hedging tactics are not optional—they’re required to keep pace with the rhythm of these events. Brevity in holding periods and tighter stop ranges may prevent surprises. Policy meetings in Brussels and Beijing won’t be streamed live, but their outcomes will be priced in real-time. We need to read between the lines of diplomatic statements almost as much as we study liquidity flows.
This needs to be a time of nimbleness—not bold directional conviction. In our case, recognising that what moves the market isn’t a single tariff or council resolution, but the shifts in expectation around those events, can provide a better edge. It’s the delta of sentiment that lends us clues, not the headline itself.
