EU–Asia Relations Briefing — February 25, 2026

Automated policy briefing on EU–Asia Pacific relations generated with AI-powered web search.

Political Relations & Strategic Rivalry

Executive Summary

EU-China political relations in the last 48 hours have been marked by Germany's high-level diplomatic engagement with China, with Chancellor Friedrich Merz undertaking his first official visit to Beijing and Hangzhou. This visit aims to foster a "fair, predictable, and rules-based framework" for relations while emphasizing a "carefully calibrated de-risking strategy" rather than economic decoupling. Concurrently, the European Union is preparing to adopt its 20th package of sanctions against Russia, which is expected to include additional Chinese entities accused of circumventing existing restrictions and supporting Russia's military-industrial complex.

EU Institutional Actions

• European Commission/Council: On February 6, 2026, the European Commission proposed the 20th package of sanctions against Russia, with adoption anticipated around late February 2026. This package is expected to include new Chinese entities involved in circumvention activities and supporting Russia's military-industrial complex. A draft version of the package, seen on February 22, 2026, reportedly contains several new Chinese entities.
• European Commission (Trade): On February 21, 2026, EU trade chief Maroš Šefčovič indicated the EU's intention to step up diplomatic engagement with China to address Beijing's substantial trade surplus and other economic frictions, aiming for "more structured, more frequent" dialogue. He also expressed hope for an "in-depth discussion" with Chinese Minister of Commerce Wang Wentao at a World Trade Organisation ministerial meeting in March.

Key Bilateral Developments

• EU-China (Germany): German Chancellor Friedrich Merz commenced his first official visit to China from February 24 to 26, 2026, with scheduled engagements in Beijing and Hangzhou. Merz articulated Germany's objective to pursue a fair, predictable, and rules-based framework for engagement, stressing the importance of preserving channels of cooperation while reducing vulnerabilities through a "carefully calibrated de-risking strategy" rather than economic decoupling. He is expected to hold high-level meetings with Chinese Premier Li Qiang and President Xi Jinping.

Sector Analysis

Trade/Investment: German Chancellor Merz's visit aims to address persistent trade tensions, structural concerns, and barriers to market access, advocating for adherence to international and bilateral rules and fair economic participation. The EU's trade chief has also called for more structured dialogue to address China's vast trade surplus. German business leaders have shown significant interest in accompanying Merz, with some advocating for improved China-Germany relations and questioning the "systemic rival" framing.
Defence/Security: The upcoming 20th EU sanctions package against Russia is set to include additional Chinese entities accused of supporting Russia's military-industrial complex and circumventing existing export restrictions. This highlights ongoing European concerns about China's indirect support for Russia's war efforts.
Technology/Digital: No major developments in the last 48 hours.
Climate/Energy: No major developments in the last 48 hours.

Implications for Analysts

• For Europe: Analysts should monitor how the EU balances its "de-risking" strategy with the imperative for continued diplomatic and economic engagement, particularly as individual member states like Germany pursue high-level bilateral visits. The upcoming sanctions package will be a key indicator of the EU's resolve to address China's role in supporting Russia.
• For Asia: Analysts should observe China's response to European diplomatic overtures and sanctions, particularly how Beijing seeks to shape narratives of "stability" and cooperation amidst Western de-risking efforts and accusations of supporting Russia.

Outlook

Strained
The ongoing diplomatic engagement, particularly Germany's high-level visit, indicates a desire to manage the relationship, but the impending EU sanctions targeting Chinese entities linked to Russia's military-industrial complex underscore persistent and significant areas of tension and strategic divergence.

Economic Relations, Trade & Investment

Executive Summary

The European Union has recently imposed definitive anti-dumping duties on acrylonitrile-butadiene-styrene (ABS) resins from South Korea and Taiwan, signaling a robust stance on trade defense against alleged unfair pricing practices. Concurrently, new EU-Asia trade dynamics are emerging, notably with a significant EU-India trade deal accelerating amidst global trade shifts, and discussions around a "Made in Europe" industrial strategy that could impact Asian supply chains. These developments highlight the EU's dual approach of protecting its domestic industries while actively forging new strategic economic partnerships in Asia.

EU Institutional Actions

• European Commission: On February 13, 2026, the Commission imposed definitive anti-dumping duties on imports of acrylonitrile-butadiene-styrene (ABS) resins from Taiwan and the Republic of Korea, following an in-depth investigation into dumped prices injuring EU manufacturers. The duties range from 5.2% to 7.5% for South Korea and 10.9% to 21.7% for Taiwan.
• European Commission: On February 12, 2026, the Commission imposed additional tariffs on electric vehicles imported from China, stemming from an investigation into alleged unfair subsidies. In a first-of-its-kind decision, the EU approved a tariff exemption for Volkswagen's China-made Cupra Tavaskkan electric SUV, in return for Volkswagen agreeing to sell the model at a minimum price and meet an annual sales quota.

Key Bilateral Developments

• EU-India: A comprehensive strategic agenda, including a significant trade deal, has accelerated, focusing on opening parts of India's domestic market for manufacturing and services exports, while making European cars and wine cheaper for Indian consumers. This partnership also encompasses cooperation in defense, security, multilateralism, mobility, and enhanced engagement in the Indo-Pacific region.
• EU-South Korea: Definitive anti-dumping duties ranging from 5.2% to 7.5% have been imposed on imports of ABS resins.
• EU-Taiwan: Definitive anti-dumping duties ranging from 10.9% to 21.7% have been imposed on imports of ABS resins.
• EU-Indonesia: No major developments in the last 48 hours. Negotiations for the EU-Indonesia Comprehensive Economic Partnership Agreement (CEPA) were officially concluded on September 23, 2025, and the agreement requires ratification by both sides for full implementation by 2027.

Sector Analysis

Trade/Investment: The EU has solidified its trade defense posture by implementing definitive anti-dumping duties on ABS plastics from South Korea and Taiwan, aiming to protect its €1.4 billion domestic market. The ongoing adjustments to tariffs on Chinese electric vehicles, including specific exemptions, indicate a nuanced approach to managing competitive pressures and fostering local production.
Defence/Security: The evolving EU-India partnership includes cooperation in defense and security, reflecting a broader strategic alignment in the Indo-Pacific region.
Technology/Digital: No major developments in the last 48 hours specifically on semiconductors, AI, or cyber, though ABS plastics are used in electronics.
Climate/Energy: The "Made in Europe" plan includes a focus on the development of clean manufacturing and decarbonization of the automotive industry, requiring carmakers to have a 40% low-emission fleet by 2030 and 75% by 2035. A new European Critical Raw Materials Centre is also being established to ensure supply and reduce external dependence.

Implications for Analysts

• For Europe: Analysts should monitor the implementation and impact of the definitive anti-dumping duties on ABS, as well as the ongoing adjustments to Chinese EV tariffs, as these measures reflect the EU's commitment to protecting strategic industries and managing global competition. The "Made in Europe" initiative, with its domestic production requirements and incentives, signals a potential shift towards greater industrial autonomy and could reshape supply chains.
• For Asia: Analysts should observe how Asian economies, particularly South Korea and Taiwan, adapt to the new anti-dumping duties on ABS, potentially redirecting trade flows. The accelerated EU-India trade deal signifies Europe's diversification efforts away from traditional partners and towards growing Asian economies, offering new opportunities and challenges for other Asian nations.

Outlook

Strained
The recent imposition of definitive anti-dumping duties on key industrial components from South Korea and Taiwan, alongside ongoing trade defense measures against Chinese EVs, indicates a period of heightened trade friction and a more protective stance by the EU towards its domestic industries, despite efforts to deepen strategic partnerships with other Asian nations like India.

Digital Policies & Innovation

Executive Summary

The EU-Singapore Digital Trade Agreement (DTA) officially entered into force on February 1, 2026, marking a significant step in EU-Asia digital relations by establishing transparent rules for cross-border digital transactions. Concurrently, a notable development in EU-South Korea digital partnerships is the ongoing €1.49 million EU-funded 'HAETAE' project, reported on February 23, 2026, which focuses on developing energy-efficient AI hardware using photonics, highlighting deepening collaboration in critical technology sectors.

EU Institutional Actions

• European Commission: The EU-Singapore Digital Trade Agreement (DTA) entered into force on February 1, 2026, following its signing in May 2025 and conclusion of negotiations in July 2024. This agreement, the EU's first standalone bilateral digital trade agreement, aims to establish transparent rules for cross-border digital transactions.
• European Parliament: On November 13, 2025, the European Parliament approved the EU-Singapore DTA, rejecting a motion to refer the deal to the Court of Justice of the European Union for a compatibility check. This approval occurred despite concerns that the agreement might weaken the Union's capacity to safeguard privacy, data protection, and accountability over software systems.
• Chips Joint Undertaking (Chips JU): In February 2024, the Chips JU launched a joint call with South Korea for projects in heterogeneous integration and neuromorphic computing technologies for future semiconductor components, with the EU allocating €6 million. This initiative led to the announcement in July 2024 of four jointly funded projects in semiconductors, co-funded by the Chips JU under Horizon Europe and the National Research Foundation of Korea.

Key Bilateral Developments

• EU-Singapore: The EU-Singapore Digital Trade Agreement (DTA) became effective on February 1, 2026. This agreement is designed to facilitate digital trade by providing legal certainty for businesses, enhancing consumer trust, and removing unjustified barriers to digital transactions.
• EU-Japan: The third Digital Partnership Council between the EU and Japan was held on May 12, 2025, in Tokyo. During this meeting, both sides committed to the "6G MIRAI-HARMONY" joint research project, initiated in April 2025 and funded by Horizon Europe, focusing on developing AI-powered networks for user-centric communications. They also agreed to launch a joint research call for collaborative quantum computing projects and continue their joint research program on semiconductors.
• EU-South Korea: A significant recent development is the ongoing €1.49 million EU-funded 'HAETAE' project, reported on February 23, 2026, involving researchers from Europe and South Korea. This project aims to develop a new generation of artificial intelligence hardware that uses photonics to dramatically cut energy consumption and enhance cybersecurity for future digital services. This is one of four jointly funded semiconductor projects announced in July 2024 under the EU-Republic of Korea Digital Partnership, co-funded by the Chips Joint Undertaking under Horizon Europe and the National Research Foundation of Korea. South Korea officially joined Horizon Europe in March 2024, allowing its researchers to participate in Pillar II of the program from 2025.

Sector Analysis

Trade/Investment: The entry into force of the EU-Singapore Digital Trade Agreement on February 1, 2026, establishes a framework for transparent rules in cross-border digital transactions, aiming to boost legal certainty for businesses and enhance consumer trust.
Defence/Security: No major developments in the last 48 hours.
Technology/Digital: Joint research efforts are intensifying, particularly between the EU and South Korea on energy-efficient AI hardware and neuromorphic computing through the 'HAETAE' project and other semiconductor initiatives. The EU and Japan are also collaborating on AI-powered 6G networks and quantum computing under Horizon Europe.
Climate/Energy: The 'HAETAE' project's focus on developing AI hardware that uses light instead of electricity directly addresses the growing energy consumption of AI data centers, contributing to greener digital services.

Implications for Analysts

• For Europe: Analysts should note the EU's proactive approach in shaping global digital trade norms through agreements like the DTA with Singapore, while also navigating internal debates on balancing trade liberalization with digital rights and regulatory autonomy.
• For Asia: Analysts monitoring Asia-Pacific dynamics should observe the increasing integration of South Korea and Japan into EU-funded research initiatives, particularly in cutting-edge areas like AI, 6G, and semiconductors, which could lead to significant technological advancements and supply chain resilience.

Outlook

Deepening
The recent entry into force of the EU-Singapore DTA and the ongoing, newly reported joint research projects with South Korea and Japan in critical digital technologies indicate a clear trajectory of deepening digital partnerships between the EU and key Asian economies.

Security & Maritime Cooperation

Executive Summary

In the last 48 hours, there have been no new significant EU security engagements in the Indo-Pacific, such as new maritime surveillance agreements with ASEAN members or joint naval exercises. The European Union's most recent public statements regarding regional stability, specifically concerning the South China Sea and the Taiwan Strait, date back to December 2025. These statements condemned dangerous actions in the South China Sea and expressed concern over military drills in the Taiwan Strait, underscoring the EU's commitment to a rules-based international order and peaceful dispute resolution.

EU Institutional Actions

No major institutional actions by EU bodies (European Commission, EEAS, Council, European Parliament) specifically related to new security engagements in the Indo-Pacific, maritime surveillance agreements with ASEAN, or joint naval exercises have been reported in the last 48 hours.

Key Bilateral Developments

• EU-Philippines: The European External Action Service (EEAS) issued a statement on December 15, 2025, condemning recent dangerous actions by the Chinese Coast Guard against Philippine fishing vessels in the South China Sea. The statement highlighted the use of water cannons and the cutting of anchor lines, which threatened safety at sea, caused injuries, and undermined lawful maritime rights. The EU reiterated that the 2016 Arbitral Award is final and legally binding and called for de-escalation and peaceful resolution of disputes in full respect of international law.
• EU-Taiwan: The EEAS issued a statement on December 30, 2025, expressing concern over China's military exercises around Taiwan, noting that these actions increase cross-strait tensions and endanger international peace and stability. The EU emphasized its direct interest in the preservation of the status quo in the Taiwan Strait and opposed any unilateral actions to change it by force or coercion, urging cross-strait dialogue.

Sector Analysis

Trade/Investment: No major developments in tariffs, FTAs, investment flows, or sanctions related to EU-Asia security engagement in the last 48 hours.
Defence/Security: No new joint naval exercises or maritime surveillance agreements were announced or conducted within the last 48 hours. The EU's general strategy continues to emphasize enhancing regional security through partnerships, dialogues, and participation in joint operations, with past examples including exercises with India and Indonesia in 2025 and 2022, respectively. The EU also supports maritime domain awareness initiatives, such as the Indo-Pacific Regional Information Sharing (IORIS) platform, utilized by countries like Singapore, the Philippines, and Indonesia.
Technology/Digital: No major developments in semiconductors, AI, cyber, or digital trade specifically linked to security engagement in the last 48 hours.
Climate/Energy: No major developments on CBAM, green partnerships, or critical raw materials directly related to security engagement in the last 48 hours.

Implications for Analysts

• For Europe: Analysts should note the consistency of the EU's messaging on adherence to international law and peaceful dispute resolution in the Indo-Pacific, particularly concerning the South China Sea and Taiwan Strait, even in the absence of new immediate security actions. The focus remains on diplomatic statements and existing cooperation frameworks.
• For Asia: Analysts monitoring Asia-Pacific dynamics should recognize the EU's continued, albeit primarily verbal, support for regional stability and international maritime law. The lack of new, immediate security initiatives from the EU in the last 48 hours suggests a steady-state approach rather than an escalation or new phase of engagement.

Outlook

Stable
The EU's security engagement in the Indo-Pacific remains stable, characterized by consistent diplomatic messaging on international law and existing cooperation frameworks, with no new major initiatives reported in the last 48 hours.

Environment, Energy & Critical Raw Materials

Executive Summary

The European Union's Carbon Border Adjustment Mechanism (CBAM) has entered its definitive phase, immediately impacting global trade and potentially leading to a margin squeeze for East Asian manufacturers of carbon-intensive goods. Concurrently, the EU is actively accelerating its trade architecture with high-growth markets in Southeast Asia, aiming to rebalance exposure and diversify critical raw material supply chains.

EU Institutional Actions

• No major institutional actions in this period

Key Bilateral Developments

• EU-ASEAN: Brussels is accelerating its trade architecture with high-growth markets, including Southeast Asia, to rebalance exposure and is considering broader tariff elimination.

Sector Analysis

Trade/Investment: The EU's Carbon Border Adjustment Mechanism (CBAM) is fully enforced as of early 2026, introducing carbon costs on imported goods and potentially leading to a margin squeeze for industries in East Asia that use steel and aluminum as inputs. The EU is also actively pursuing accelerated trade architecture with Southeast Asian nations, including potential broader tariff elimination, to build resilience and diversify supply chains.
Defence/Security: No major developments.
Technology/Digital: No major developments.
Climate/Energy: No major new developments on green partnerships or critical raw materials partnerships in Southeast Asia within the last 48 hours, beyond the general strategic push for trade diversification.

Implications for Analysts

• For Europe: Analysts should monitor the immediate economic impact of CBAM on EU importers and the effectiveness of the accelerated trade architecture in achieving critical raw material diversification.
• For Asia: East Asian manufacturers, particularly in carbon-intensive sectors, face direct cost implications from CBAM, requiring urgent adaptation strategies. Southeast Asian nations can expect increased EU engagement aimed at trade and raw material supply chain diversification.

Outlook

Stable
While CBAM introduces immediate trade friction and cost pressures for East Asian manufacturers, the EU's concurrent strategic push for deeper trade architecture and diversification with Southeast Asia indicates a stable, albeit evolving, long-term relationship focused on resilience and green transition.

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