(BSS/AFP) - EU leaders agreed during talks Thursday that the bloc must develop beefed-up trade defences to curb a surge of Chinese exports deemed an existential threat to European industry by Brussels -- while simultaneously seeking "constructive dialogue" with Beijing.

There is a growing consensus in the European Union that it is too dependent on China, and Brussels fears this makes it vulnerable to potential coercion and supply shocks.

The 27-nation bloc`s trade deficit in goods hit around 360 billion euros ($413 billion) last year, meaning Chinese exports sharply exceeded the EU`s.

During a two-hour summit dinner in Brussels, leaders chewed over how the EU could address the imbalance, and whether the bloc needed to boost its arsenal.

After talks ended early on Friday, an EU official said the leaders tasked the commission with continuing to engage "in a constructive dialogue with our main economic partners" but did not directly say China.

They also asked the executive "to develop and eventually complement the toolbox in the area of trade defence" and to make sure the EU has "all the instruments it needs to defend its interests and derisk", the official said.

While EU capitals agree on a common diagnosis, the positions differ on the cure and several leaders on Thursday had called for dialogue as a priority.

Spanish Prime Minister Pedro Sanchez struck a more conciliatory tone than his counterparts before the dinner.

"We need friends, we need balanced relationships, we need to be pragmatic, and we need to build bridges both with major economies and potential allies, such as China," Sanchez told reporters.

- Following Trump`s playbook? -

One way to beef up the EU`s arsenal could be creating a new tool to impose sector-specific tariffs such as chemicals or green tech -- taking a page out of President Donald Trump`s playbook.

French President Emmanuel Macron last month called for a "European equivalent of Section 301" -- the trade tool Trump has employed to set sweeping tariffs -- arguing Europe`s "sovereignty is at stake".

Germany has until now adopted a cautious posture because its economy is more exposed to potential retaliation, while Spain has sought to avoid tensions as it chases Chinese investment.

But Berlin appeared to be coming around to France`s way of thinking.

A German official said Berlin was "open" to new tools if they are necessary so long as they were "not targeted at specific recipients".

German Chancellor Friedrich Merz, however, would not be drawn on China by reporters in Brussels.

Irish Prime Minister Micheal Martin said before the dinner he wanted to see "the shape and nature of any mechanisms" introduced but warned Europe had to make sure it understood the consequences.

The EU official did not comment on what any new tools would look like.

Concern about Chinese dominance is not limited to the EU.

Fears are rising in the West over Beijing`s control in the market for rare earth minerals used in everyday electronic appliances, and China was on the agenda of G7 talks in France this week.

Brussels often evokes the need for fair competition, pointing to the unfair advantage Chinese companies have because of massive state subsidies.

Between 2005 and 2024, Chinese firms received around three to eight times more government support than firms in the Organisation for Economic Co-operation and Development, according to the OECD, which called it "a conservative estimate".

- EU appetite for a fight? -

Even as its resolve appears to be hardening, the EU has shown no appetite to trigger a broader trade war with China.

Fears over Chinese retaliation are not unfounded.

After the EU hit Chinese electric cars with higher tariffs in 2024, China imposed anti-dumping duties on European cognac.

And Beijing has vowed to hit back if the EU pushes through rules that would exclude certain products manufactured outside the bloc from public contracts.

Sefcovic has invited Chinese Commerce Minister Wang Wentao to Brussels later this month as the bloc still hopes it can prevent escalation through dialogue with China -- but an EU official would not confirm the visit.