DUBLIN — EU and Chinese officials are already discussing the next sectors for trade talks as Brussels prepares to review implementation of their latest understanding in January, EU trade chief Maroš Šefčovič told POLITICO on Friday.

“In January we can assess how it worked and if it delivered all parts of our agreement,” Šefčovič said, referring to an Oct. 9 pact by which China will voluntarily reduce exports of hybrid vehicles to the EU by almost half to 350,000 units in 2027.

That deal also lowers tariffs on European goods such as auto parts and footwear, and smooths exports of rare earth elements to the EU. 

After a scheduled January videoconference with his counterpart Wang Wentao, Šefčovič said he hopes the two can deliver results in March 2027 at their next round of in-person talks in Brussels. 

“I would like to see that we both have an understanding of what sectors we are going to focus on next,” he said.

The intense engagement with China comes as the bloc seeks to rebalance mutual economic ties, which EU officials say have been distorted by Chinese subsidies, market barriers and a surge in imports. Šefčovič stressed the urgency of the task, given that the EU’s trade deficit with China “reached almost €197 billion in the first half of this year. At this rate, we could break the 2022 record” of €397.3 billion.

“A part of our team is working on implementing all what we agreed, and [another] part of the team is talking to our Chinese counterparts on what should be the next sectors, next areas on what we want to focus the work on. Hopefully with another [Trade and Investment Consultation] in Brussels we can actually deliver the results,” he added. 

“The primary objective for us … is to rebalance the trade.”

At a press conference on Friday, the trade chief said the European Commission was looking to shield more sectors from Chinese overcapacity, with plastics the leading candidate for safeguard measures — a mix of quotas and tariffs.

“We are currently analyzing what would be the best candidates and sectors to be addressed” through safeguard measures, he said. “Currently, what I think is the closest, is the plastic sector.”

Brussels is also juggling requests from the EU’s 27 member countries, which all seek to protect the industries that are key to their economies.

Commission President Ursula von der Leyen told EU leaders last week that Brussels wants to shield the chemical and machinery sectors next, POLITICO reported.

Šefčovič added that the European Commission was looking at proposing new trade tools to nudge EU companies to diversify their suppliers, expected in early December.

“We would respect what we have heard from every single business: Keep it simple, no additional reporting,” he said. 

The EU executive is also looking to incorporate a proposal by France and Germany for a new tool that would allow Brussels within days to restrict — or even close — access to Europe for countries that severely distort the bloc’s single market. 

“It’s better to present a new instrument,” Šefčovič told POLITICO. “We could initiate it very quickly and … act very quickly.”

BRUSSELS — NATO is beginning talks this month on the forces and weapons allies would need to defend against a Russian attack — and how they would pay for them.

The talks will set capability targets for 2029, requiring each of NATO’s 32 member countries to provide specific forces and equipment.

The deadline raises the stakes: European officials have warned that Russia could be ready to attack a NATO country by then.

At the same time, the Trump administration is weighing a sharp reduction in U.S. forces in Europe, which could leave the alliance short of troops and critical capabilities with fewer like refueling aircraft, long-range missiles and intelligence, surveillance and reconnaissance assets.

The negotiations will test how much each country is willing to spend, how much Europe can do without the U.S. and whether NATO’s military plans should make greater use of technologies such as robotics and artificial intelligence.

“It’s going to be tough,” said one senior NATO diplomat, who, like others, was granted anonymity to speak freely on the sensitive issue. “Burden sharing, the U.S., how to combine the level of ambition with political priorities … it’s huge.”

NATO allies will begin discussing the broad mandate for the new targets — known as Political Guidance — in the coming days. It’s the first step in a five-part effort called the NATO Defence Planning Process.

“The ambition … is for this to be a transformation cycle and not one that’s just off the shelf,” said French Adm. Pierre Vandier, NATO’s Supreme Allied Commander Transformation and the alliance’s chief for future warfare.

POLITICO spoke to 15 current and former NATO officials and diplomats to get a sense of the five key debates likely to define the negotiations.

1. Deciding on ambition

The most significant issue will be deciding exactly how many troops and military capabilities allies want to provide — known as the level of ambition.

Historically, NATO allies have agreed that beyond the forces needed for major operations, they should have 18 spare brigades — each a unit of about 5,000 soldiers — to carry out smaller crisis-management missions outside alliance territory, like Afghanistan or Kosovo.

But U.S. pressure to hand off more security responsibility to European allies — dubbed NATO 3.0 — could put pressure on allies to reduce or even eliminate requirements for any smaller operations.

Discussions will also cover whether to speed up the process itself in future in response to the furious pace of battlefield innovation, from AI to ground robots. 

Allies are also likely to tackle how to provide conventional military support — like ground troops or aircraft — to nuclear-armed countries like the U.K. and U.S.

“Conventional support … capabilities are absolutely part of the NDPP process,” said Nassima Barrows, NATO’s nuclear policy director, “so that is one of the big messages that we underline as a part of the next [negotiations].”

2. Filling the American gap

Looming over the talks is the Pentagon’s upcoming review of American forces in Europe. Washington earlier this year already pulled assets like strategic bombers, fighter jets, drones, submarines and warships from the pool of forces NATO can draw on.

The review lands in December, midway through the NATO talks, prompting concerns it may delay negotiations. There are worries that the U.S. could pull out assets Europe needs, like heavy transport aircraft.

Washington’s drive to curb its military presence in Europe will set off a scramble among allies to replace its capabilities. That will open discussions on how to share the burden fairly, likely to be very difficult as national budgets are increasingly squeezed.

“Not so long ago, the whole NATO process was … you do the math on what NATO needs, and then when you realize you don’t have everything, the U.S. fills in the gaps,” said Camille Grand, head of the ASD defense lobby and a former senior NATO official. “This is no longer the case.”

One way to tackle that is to shift away from specific weapons requirements to assigning objectives to countries, such as having their forces eliminate Russian command outposts. That could create more flexibility for European allies to who can’t access U.S. weapons like Tomahawk cruise missiles.

“We don’t have to have thousands of Tomahawks … but we can have thousands cheaper, low-cost alternatives,” said Fabrice Pothier, a former NATO policy planning director who is now CEO of the Rasmussen Global consultancy.

3. Regional divides

The focus on Russia is likely to cause friction with allies worried about other threats.

On paper, NATO espouses a “360-degree” approach to security. In practice, the alliance’s focus has shifted eastward since Russia’s full-scale invasion of Ukraine in 2022, and northward in the past year as it set up an Arctic mission (largely in response to pressure from Donald Trump over Greenland).

Some allies would like to see more attention given to the alliance’s southern and southeastern flanks. Issues include Russian mercenary presence in Libya, the potential for weaponized migration and increased submarine activity, alongside drone attacks on vessels in the Black Sea.

“There is too much north,” said a second NATO diplomat. “We should reset.”

4. More drones or more tanks

The drone warfare dominating the frontlines in Ukraine is likely to force a debate on the balance between adding unmanned capabilities and continuing to build up conventional military equipment like tanks and artillery.

Most allies are making plans to increase their use of unmanned systems.

The U.K. this year announced a “hybrid fleet” that leans on autonomous vessels like Type 93 uncrewed underwater vehicles. France has earmarked roughly €8.4 billion for drones and loitering munitions while Germany is establishing its first dedicated drone regiment next year.

Europe’s difficulties in recruiting soldiers also feed into the debate, said Grand. “One thing that is driving everybody in the direction of more unmanned [systems] is we have aging societies — we have a manpower issue.”

Countries also have to figure out how to match Russia’s technological developments without breaking national defense budgets.

Vandier said Russia produces 9 million drones a year, a figure that requires a “pretty radical effort” from the alliance. He suggested one fix could be a subscription-style model for hardware updates to keep weapons systems from becoming obsolete.

5. Learning from Ukraine

Most NATO allies agree that Ukraine contributes to their security thanks to its large and battle-hardened military and its rapid technological developments in air, sea and ground drones, air defenses, missiles, and its advanced Delta battlefield management system.

That has some countries calling for closer military and industrial cooperation, even as others urge caution because the war in Ukraine is different from NATO’s doctrine, which calls for rapid-maneuver warfare, air superiority and standoff precision strikes.

“There are tremendous lessons from the conflict that we need to capture,” NATO’s top commander, U.S. Gen. Alexus Grynkewich, told the European Parliament earlier this month. But “we do not want to fight that kind of war.”

The Ukraine war’s spillover into the Black Sea is creating a growing European security and commercial risk: Drones are hitting ships and killing sailors, grain routes are under strain, and insurers and investors are weighing the cost of operating through Ukraine’s ports.

Five commercial vessels have been hit in Bulgarian and Romanian waters over the past week alone, leaving at least four people dead, several sailors missing and others injured. In response, Black Sea countries Bulgaria, Romania and Turkey have raised the issue at NATO, asking for more focus toward the region and joint support, according to two alliance diplomats.

“The attack within Bulgaria’s exclusive economic zone is absolutely unacceptable. It constitutes a serious breach of maritime and international law and will further jeopardise safe navigation in the Black Sea,” Bulgarian Prime Minister Rumen Radev said on X after the attacks last week.

Russia has been attacking Ukrainian ports and cities in the area since the start of its full-scale invasion. But the recent strikes have brought the spillover into NATO territory. If they continue, EU leaders will face pressure to protect Black Sea shipping and keep Ukrainian trade moving.

Those questions will be top of mind at Thursday’s European Council summit. According to draft conclusions obtained by POLITICO, leaders are expected to discuss the “immediate restoration of safe passage for grain cargo ships.”

A wider problem

Russia is not the only country using naval drones in the Black Sea. Ukraine has also used them against Russian-linked shipping. In June, a Ukrainian sea drone exploded in Romania’s Constanța port after Kyiv said it had veered off course because of Russian electronic interference.

“The Black Sea situation is quite dangerous because attacks are coming from both [sides],” said an EU shipping representative, who was granted anonymity to speak freely. “You have to worry about both.”

Attribution can also be difficult. Bulgarian Prime Minister Rumen Radev said Wednesday that investigators still have not proven that Russia is behind the strikes — although some have attributed his reticence to his broadly softer approach toward the Kremlin.

Drone operations by both Russia and Ukraine are likely to continue as long as each has the money and production capacity to sustain them, said Cristian Vlas, assistant research manager for Eastern Europe at the think tank ACLED.

Oleksii Goncharenko, a Ukrainian lawmaker and founder of the Black Sea Security Forum, told POLITICO that a “serious diplomatic initiative” was needed, bringing together Ukraine, Russia and a third-party guarantor, such as Turkey, “to restore freedom of navigation in the Black Sea.”

Grain routes under pressure

The security risk is disrupting routes that carry Ukraine’s harvest to market, with consequences for EU transport links. Black Sea ports are Ukraine’s main export gateway, handling around 95 percent of the country’s grain exports, as well as significant volumes of iron ore. Shipping traffic has fallen as the security risk has grown.

Some cargo is being rerouted to the River Danube, but capacity there has been stretched in recent months as drought pushes water levels to record lows. Operators are trying to add rail capacity, but that risks moving the bottleneck westward to Romania.

Moving more Ukrainian grain overland also risks reviving tensions with farmers in neighboring EU countries, Vlas said. Romanian farmers have worried that Ukrainian produce meant only to transit could stay on the domestic market, he added, while transport operators are already juggling competing demands for capacity.

Ukraine’s Agriculture Minister Taras Vysotskyi has warned that millions of tons of unsold grain is piling up, and that farmers who can’t sell won’t be able to afford to resow all their land.

Bulgaria is working with Romania and Turkey on a joint initiative to protect freedom of navigation in the Black Sea, which Radev plans to bring to EU leaders on Thursday.

Following the Black Sea countries’ request at NATO, military officials are likely to look into possible options such as shifting counter-drone systems to the region, the two alliance diplomats said. Radev said Sofia will convene his counterparts in Ankara and Bucharest to examine further proposals, while a senior Bulgarian official called for new joint anti-drone systems with Romania, partly financed by the EU.

Investment at risk

The attacks also threaten what had started to look like a renewed bet on Ukraine’s ports. MSC, the world’s largest container line, was among the biggest and newest investors, reportedly acquiring a majority stake in a container terminal at a port near Odesa in May.

Ukraine has also been offering investors a long-term concession at the Chornomorsk terminal near Odesa. This terminal is one of Ukraine’s largest planned port public-private partnerships and part of what is expected to be a multibillion-euro reconstruction effort involving European companies.

But people who work in Ukraine’s ports say the case for rebuilding is collapsing.

“No one is ready to invest and rebuild, since you know that tomorrow there will be another missile, another pack of drones,” Oleg Grygoriuk, chairman of Ukraine’s Marine Transport Workers’ Trade Union, said.