von der Leyen’s 2026 State of the Union speech: A turning point in EU-China relations?

von der Leyen’s 2026 State of the Union speech: A turning point in EU-China relations? 

In the annual State of the Union speech last month, the European Commission President Ursula von der Leyen emphasized that the trade relationship between the EU and China has reached a critical juncture. 

The rapidly growing trade deficit with China has led several EU member states to call for stronger countermeasures. Earlier this summer, they agreed on a tougher approach towards China aimed at reducing strategic dependencies and addressing economic imbalances. New EU-China talks were held this October, with the bilateral relationship now entering a decisive phase. 

Challenges and trade-offs facing Europe 

For China and the EU, the key challenge is to stabilize relations through compromise; otherwise, trade tensions are likely to escalate. Unlike her last speech in 2023, von der Leyen announced no new measures targeting China this year.   

China has positioned itself to respond to new trade policy measures and has introduced a range of new regulations within the area of economic security over the past year. At the same time, both China and the EU remain dependent on access to each other’s markets, which suggests that restoring balance to the relationship should be in the interest of both sides. Any decision by the EU to introduce new trade defense measures or diversification tools aimed at reducing economic vulnerabilities would likely trigger Chinese countermeasures. Strengthening European competitiveness will also require securing access to critical raw materials and deepening partnerships with like-minded countries.  

Innovation and enhanced resilience 

von der Leyen highlighted AI as a decisive issue for the future. However, rather than competing with the United States and China to develop the most advanced AI models, the focus is on the practical application of AI across several sectors. This approach resembles China’s “AI+ Initiative,” where AI serves as the central driver of productivity and economic transformation. China has demonstrated its ambitions through initiatives such as the World Artificial Intelligence Cooperation Organization (WAICO), which seeks to shape international cooperation and standards for AI development and governance. 

To build a more resilient Europe that stands stronger in the face of Chinese competition, there may be a need to adopt a more long-term perspective. Such an ambition could involve strengthening innovation capacity in several strategic technology areas. This is particularly relevant given China’s massive investments in innovation and basic research to accelerate strategic technologies by 2030.

Camilla Andreasson