The EU’s surprise deal with China on hybrid cars last week was supposed to ease the pressure on Beijing. Instead, Brussels is preparing to intensify its crackdown on Chinese trade practices, emboldened by the discovery that its threats are finally delivering results.

Now, those driving trade policy for the bloc believe they have landed on a two-track formula. Intensive dialogue is seen to have yielded results and will continue.

But so too will the European Union’s efforts to counter what they see as distortive policies in China. There is a clear sense that Beijing responded positively to a threat from the two biggest EU members, France and Germany, last week to quickly close the market to Chinese firms.

It represented a dramatic pivot from Berlin – by far China’s biggest trade partner in Europe – which has previously opposed assertive measures.

In meetings with businesses, Chinese Commerce Minister Wang Wentao was said to have been struck by the shift. He noted, sources said, the potential for a political backlash in Europe if Beijing did not check its exports in important sectors, which they believe helped pave the way for a deal.

“Why is China agreeing to something they’ve never agreed to before? We put that question to [EU Trade Commissioner] Maros Sefcovic and he said: ‘They start to realise that they are killing their customers’,” said a senior EU diplomat who, like others interviewed for this story, spoke on condition of anonymity.

Buoyed by convincing China to accept an agreement that will limit its hybrid car exports to the EU at 350,000 a year – less than half the forecast volume for 2026 – Brussels is now revving the engines and ready to accelerate on a raft of unilateral actions.

“It goes hand in hand – in order to have a credible dialogue, we are seen to have instruments that allow us to take action when needed,” said a second diplomat.

A spate of safeguard investigations is expected soon in sectors ranging from pharmaceuticals, chemicals and machinery. They are likely to use tariffs and quotas to restrict Chinese access to industries in which they are dominant, much like the hybrid car arrangement, but are seen as a stopgap while officials come up with new tools.

Before Christmas, the union’s top brass want to present a series of new weapons that will help them reduce dependencies on China and compensate those hit by Beijing’s retaliation.

The cherry on top for Brussels would be a tool to close the EU market to Chinese companies should the government there take coercive actions in response. There are questions about whether such a complicated instrument could be ready by December, but a varied range of member states are now lining up behind the concept, first proposed in the Franco-German paper last week.

“We see on export moderation that China agrees to the fact that there is a problem, that something needs to be done in terms of rebalancing, and that is of course a conversation that we will continue,” said Tomas Baert, a trade adviser to European Commission President Ursula von der Leyen, at an event in Brussels on Wednesday.

“But that alone will not solve the structural imbalances. I think one sectoral solution is probably not enough to deal with the structural issue that we have, and that is where leaders tomorrow will actually take stock and see what more we need to do,” said Baert, referring to Thursday’s European Council summit, where the China policy will be discussed.

It would be a stretch to say that Europe is speaking with one voice on China, but in the run-up to Thursday’s meeting, there are notably fewer discordant notes in the choir.

“The French-German paper is helpful that it has shown the Chinese that we are quite united. I mean, if you bring together Germany on the one hand and France on the other, and it kind of I think gave also a boost of credibility to the EU,” another diplomat said.

Talks with China are continuing at working level, with the EU’s top trade enforcer Denis Redonnet travelling to China for talks on medical devices in the next weeks. Sefcovic will speak with counterpart Wang in January by videoconference before another meeting in March.

But the commission’s trade bureaucrats will continue developing sharper tools in the background, despite warnings from Beijing that it will retaliate against any deviation from the cooperative agenda.

“You always have to be ready for escalation, but we shouldn’t let ourselves be led by fear,” said a third senior diplomat, who added that capitals remained galvanised by the task of tackling what is described as the China Shock 2.0.

“I don’t think there are many member states on the table who see this hybrid deal and now it’s done. We’re chipping away and it’s not something you can do in one go. So more should follow,” they said.

At the heart of the energy is a fear that if Europe does not move yet to protect its industries from high quality yet cheaper Chinese competition, there will be nothing left to shield.

In Berlin, too, the success of the far-right party Alternative for Germany in recent state elections sparked fears that if mainstream parties do not do something about it, then populists will.

The urgency was made plain in China’s trade data for September, published on Wednesday, which showed that last month alone, China’s trade surplus with Germany rose by 201.7 per cent compared to September 2025. For France, the gap expanded by 251.8 per cent, while for the whole EU it was up 52.3 per cent.

“If current trends continue or accelerate, large parts of Europe’s industrial base are at risk and China’s supply chain dominance will continue to increase. That could undermine Europe’s prosperity, its social model and its ability to act geopolitically,” wrote Etienne Hora, a specialist in geoeconomics at Bertelsmann Stiftung, a German think tank.

In a sign that the EU’s 27 members are coalescing around a hardline China strategy, a draft statement for the European Council summit was updated on Wednesday to demand the commission “urgently enhance the EU toolbox with new instruments to better address these imbalances”.

The change was subtle, but significant by the careful standards of the EU – which remains reluctant to directly name China as it seeks to maintain some diplomatic decorum. It reflected, almost verbatim, oral conclusions communicated after the last summit in June, which were not made public.

The shift on China – also breakneck compared to the glacial pace at which Brussels ordinarily moves – even caught EU trading partners by surprise. Both parties to the deal insisted that the quotas on hybrid vehicles should apply to all other countries, otherwise they would breach World Trade Organization rules.

“China’s quota will not be lower than that of any other import source for the EU,” read a Chinese commerce ministry statement.

This appeared to be news, however, to Turkish Trade Minister Omer Bulat, who met Sefcovic in Brussels on Tuesday. Asked after the meeting by the South China Morning Post what sort of quota his country – a major automotive hub – has been allocated for hybrid car exports, Bulat claimed it would not apply because Ankara has a customs union with the EU. “Therefore, it has nothing to do with the EU’s new deal with another country,” he said. The European Commission did not immediately respond to a request to clarify whether Bulat was correct, but trade experts agreed that his remarks were likely wide of the mark – a sign, perhaps, that Brussels’ new trade policy is moving so quickly that even some of its closest partners are struggling to keep up.