EU–Asia Relations Briefing — February 23, 2026

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

Political Relations & Strategic Rivalry

Executive Summary

In the last 48 hours, EU-China political relations have been characterized by the European Union's push for more structured diplomatic engagement to address persistent economic frictions, alongside a significant move to restrict Chinese entities from participating in critical EU technology programs. While no new EU sanctions on Chinese entities linked to Russia's military-industrial complex were announced, the EU's "de-risking" strategy is visibly evolving through targeted actions in the technology sector and continued high-level diplomatic efforts.

EU Institutional Actions

• European Commission: On February 21, 2026, EU Trade Chief Maroš Šefčovič stated the EU's intention to step up diplomatic engagement with China for a "more structured, more frequent" dialogue to address economic imbalances and export controls on critical materials.
• European Commission: Effective this year (2026), the EU has barred organizations based in China from applying for its €93 billion Horizon Europe grants in "critical areas" such as artificial intelligence, quantum technologies, semiconductors, and biotechnology, citing concerns over research security and potential military applications.
• European Council: No major institutional actions in this period.
• European Parliament: No major institutional actions in this period.

Key Bilateral Developments

• EU-China: German Chancellor Friedrich Merz is scheduled to travel to China next week, indicating ongoing high-level diplomatic engagement despite underlying tensions.
• EU-China: Lithuania's Foreign Minister Kęstutis Budrys, ahead of a meeting of EU trade ministers, expressed a preference for "decoupling" from Beijing rather than merely "de-risking," highlighting divergent views within the EU on China strategy.

Sector Analysis

Trade/Investment: The EU aims to address China's vast trade surplus, which reached a record $1.2 trillion in 2025, and persistent economic friction points, including China's export controls on strategically critical rare earths and legacy chips. The EU's "de-risking" strategy is moving towards the enforcement of existing tools, particularly in sectors exposed to overcapacity and state support.
Defence/Security: No major developments in the last 48 hours. The most recent EU-China security and defence consultations were held on February 22, 2023, where they exchanged assessments on regional security issues in Europe, focusing on the Russian war in Ukraine, and Indo-Pacific security, including the South China Sea and Taiwan.
Technology/Digital: The EU's decision to exclude Chinese entities from critical technology programs like Horizon Europe grants for AI, quantum, semiconductors, and biotechnology signifies a pivot from collaboration to strategic competition in these sensitive areas.
Climate/Energy: No major developments in the last 48 hours. China's Ministry of Commerce (MOFCOM) previously deemed the EU's Carbon Border Adjustment Mechanism (CBAM), which entered into force on January 1, 2026, as unfair and protectionist.

Implications for Analysts

• For Europe: Analysts should note the EU's increasing willingness to take concrete, restrictive actions in strategic sectors like technology, even while simultaneously pursuing "more structured" diplomatic engagement, reflecting a nuanced and sometimes contradictory approach to "de-risking."
• For Asia: Analysts monitoring Asia-Pacific dynamics should observe how China responds to the EU's targeted restrictions in critical technology, as this could influence Beijing's own policies regarding international research cooperation and its engagement with other global partners.

Outlook

Strained
The EU's recent actions to bar Chinese entities from critical technology grants, coupled with ongoing trade imbalances and differing views on engagement versus decoupling, indicate continued strain in the political relationship, despite calls for more structured dialogue.

Economic Relations, Trade & Investment

Executive Summary

The European Union has intensified its diplomatic engagement with China to address persistent economic imbalances, with the EU's trade chief advocating for more structured dialogue. Concurrently, the EU has imposed definitive anti-dumping duties on specific high-tech components from South Korea and Taiwan, signaling a continued focus on protecting domestic industries. While the EU-Indonesia Comprehensive Economic Partnership Agreement (CEPA) awaits final ratification, these recent developments highlight the EU's dual strategy of seeking deeper engagement while actively employing trade defense measures in its economic relations with Asia.

EU Institutional Actions

• European Commission: On February 21, 2026, EU trade chief Maroš Šefčovič stated the EU would aim to step up its diplomatic engagement with China to address Beijing's significant trade surplus and other economic friction points. He expressed hope for an in-depth discussion with Chinese Minister of Commerce Wang Wentao at a World Trade Organisation ministerial meeting in March.
• European Commission: On February 13, 2026, the European Commission imposed definitive anti-dumping duties on imports of acrylonitrile-butadiene-styrene (ABS) resins from Taiwan and the Republic of Korea, with duties ranging from 5.2% to 7.5% for Korea and 10.9% to 21.7% for Taiwan. These duties apply from February 12, 2026, following an investigation that found dumped prices were injuring EU manufacturers.
• European Commission: On February 10, 2026, the Official Journal published a Commission Implementing Decision accepting a price undertaking from Volkswagen (Anhui) for its CUPRA Tavascan model, exempting it from countervailing duties on imports of new battery electric vehicles from the Chinese Mainland. This allows the model to be exported into the EU at or above its proposed minimum import price.
• European Commission: The Commission is planning to introduce new legislation, the 'Industrial Accelerator Act', later this month (set for publication on February 25, 2026), which will reportedly require electric vehicles receiving state support to source at least 70% of their components (excluding batteries) from the EU or be fully assembled within the region.

Key Bilateral Developments

• EU-China: German Chancellor Friedrich Merz is scheduled to travel to China next week (from the week of February 21, 2026), indicating ongoing high-level engagement despite trade tensions.
• EU-South Korea/Taiwan: Definitive anti-dumping duties on ABS resins from South Korea and Taiwan were imposed on February 13, 2026, affecting a €1.4 billion EU market where imports from these two economies had a combined market share of 31%.
• EU-Indonesia: Indonesia is aiming to sign the Comprehensive Economic Partnership Agreement (CEPA) with the EU by May 2026. The agreement, which reached a "substantive conclusion" in September 2025, is currently undergoing a "legal scrubbing" process and translation, with Jakarta targeting an entry into force in early 2027.
• EU-ASEAN: The EU is actively negotiating three new free trade agreements with Malaysia, the Philippines, and Thailand, with an aim to conclude them by 2027, seeking to boost exports and investment and deepen trade relations with the ASEAN bloc.

Sector Analysis

Trade/Investment: The EU has recently imposed definitive anti-dumping duties on ABS plastic imports from South Korea and Taiwan, with rates up to 7.5% and 21.7% respectively, to counter unfairly priced imports. In the electric vehicle sector, the EU continues to apply tariffs on Chinese EVs, though it has accepted a price undertaking from Volkswagen (Anhui) for a specific model as an alternative to duties.
Defence/Security: No major developments in military cooperation or maritime security within the last 48 hours.
Technology/Digital: The EU's planned 'Industrial Accelerator Act' aims to increase local production within its automotive industry by requiring 70% local content for EVs receiving state support, which could impact reliance on Asian high-tech components and battery technology.
Climate/Energy: The EU's Carbon Border Adjustment Mechanism (CBAM), which entered into force on January 1, 2026, applies carbon pricing to imports of certain goods, including steel and aluminum, impacting trade with Asian partners.

Implications for Analysts

• For Europe: Analysts should monitor the effectiveness of the EU's differentiated approach to trade defense, balancing protective measures for domestic industries with efforts to maintain dialogue and secure market access in Asia. The upcoming 'Industrial Accelerator Act' will be a key indicator of the EU's commitment to reshoring and local content requirements.
• For Asia: Analysts should observe how Asian economies, particularly China, South Korea, and Taiwan, adapt to the EU's trade defense measures and local content requirements. The progress of the EU-Indonesia CEPA and other regional trade agreements will be crucial for understanding evolving trade patterns and supply chain diversification strategies.

Outlook

Stable
The EU is pursuing a stable yet assertive trade policy, characterized by ongoing diplomatic engagement with China to address trade imbalances, while simultaneously implementing specific trade defense measures against dumped imports from South Korea and Taiwan.

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 the EU's digital trade policy and establishing transparent rules for cross-border digital transactions. Concurrently, the EU reaffirmed its commitment to AI innovation and international cooperation with India, with the European Commission endorsing the Leaders' Declaration at the AI Impact Summit 2026 and launching new initiatives to connect European companies with India's ICT talent.

EU Institutional Actions

• European Commission: On February 1, 2026, the EU-Singapore Digital Trade Agreement (DTA) entered into force, establishing transparent rules for cross-border digital transactions and enhancing consumer trust.
• European Commission: On February 20, 2026, Executive Vice-President Henna Virkkunen endorsed the Leaders' Declaration at the AI Impact Summit 2026 in New Delhi, India, emphasizing the EU's commitment to strengthening its partnership with India and promoting AI innovation and international cooperation.
• European Commission: On February 20, 2026, Executive Vice-President Virkkunen launched the European Legal Gateway Office with India's Minister of External Affairs, Subrahmanyam Jaishankar, aiming to connect European companies with India's ICT talent base.

Key Bilateral Developments

• EU-Singapore: The EU-Singapore Digital Trade Agreement (DTA) came into force on February 1, 2026, establishing a framework for digital trade that includes provisions for online consumer protection, personal data and privacy, and the prohibition of customs duties on electronic transmissions. This agreement, the EU's first standalone bilateral digital trade agreement, also prohibits unjustified data localisation requirements and forced transfers of source code.
• EU-India: On February 20, 2026, the EU, represented by Executive Vice-President Virkkunen, participated in the AI Impact Summit 2026 in New Delhi, endorsing the Leaders' Declaration and launching initiatives like the European Legal Gateway Office to foster digital collaboration.
• EU-South Korea: No major new joint research projects under Horizon Europe were announced in the last 48 hours. However, it is noted that the EU and South Korea previously selected four co-funded semiconductor projects in July 2024 under the Horizon Europe Chips Joint Undertaking, focusing on heterogeneous integration and neuromorphic chips for AI systems. South Korea officially joined Horizon Europe in March 2024, enabling its researchers to apply for grants in Pillar II from 2025.
• EU-Japan: No major new joint research projects under Horizon Europe were announced in the last 48 hours. The second EU-Japan Digital Partnership Council, held on April 30, 2024, agreed on future cooperation in AI, 5G, 6G, and semiconductors, and signed a Memorandum of Cooperation on digital identities.

Sector Analysis

Trade/Investment: The entry into force of the EU-Singapore Digital Trade Agreement on February 1, 2026, is a significant development, setting transparent rules for digital trade, promoting paperless transactions, and prohibiting customs duties on electronic transmissions, thereby enhancing legal certainty and consumer trust.
Defence/Security: No major developments in defence/security related to digital partnerships were reported in the last 48 hours.
Technology/Digital: The EU's engagement at the AI Impact Summit in India and the launch of the Frontier AI Grand Challenge underscore a continued focus on AI innovation and international cooperation, while past EU-South Korea collaborations highlight ongoing efforts in semiconductors and neuromorphic computing.
Climate/Energy: No major developments in climate/energy related to digital partnerships were reported in the last 48 hours.

Implications for Analysts

• For Europe: Analysts should monitor the practical implementation and impact of the EU-Singapore DTA as a template for future digital trade agreements, particularly concerning data flows and digital rights, and assess the effectiveness of new initiatives like the European Legal Gateway Office in strengthening digital talent pipelines with key Asian partners.
• For Asia: Analysts should observe how the EU's proactive digital policy, including its engagement with India on AI and the operationalization of the EU-Singapore DTA, influences regional digital governance standards and fosters deeper technological integration and investment opportunities with European partners.

Outlook

Deepening
The recent entry into force of the EU-Singapore DTA and the EU's active engagement in AI cooperation with India demonstrate a clear trajectory towards strengthening and expanding digital partnerships across Asia.

Security & Maritime Cooperation

Executive Summary

No major new maritime surveillance agreements with ASEAN members or joint naval exercises involving the EU in the Indo-Pacific have been reported within the last 48 hours (February 21-23, 2026). Similarly, no new statements specifically regarding stability in the South China Sea or the Taiwan Strait by EU institutions were identified in this period.

EU Institutional Actions

• No major institutional actions in this period

Key Bilateral Developments

• No major developments

Sector Analysis

Trade/Investment: No major developments.
Defence/Security: No major developments.
Technology/Digital: No major developments.
Climate/Energy: No major developments.

Implications for Analysts

• For Europe: Analysts should note the absence of new, publicly reported EU security engagements in the Indo-Pacific within this narrow timeframe, suggesting a period without immediate, high-profile announcements in this specific domain.
• For Asia: Analysts monitoring Asia-Pacific dynamics will find no new direct EU security interventions or statements on contentious maritime issues within the last 48 hours, indicating a stable, albeit quiet, period from the EU perspective.

Outlook

Stable
The absence of new, publicly reported developments within the last 48 hours suggests a stable, rather than escalating or de-escalating, immediate outlook for EU security engagement in the Indo-Pacific.

Environment, Energy & Critical Raw Materials

Executive Summary

There have been no major reported developments in the last 48 hours concerning the EU's Carbon Border Adjustment Mechanism (CBAM) affecting trade with East Asian manufacturers, new EU partnerships for critical raw material diversification in Southeast Asia, or green energy cooperation between the EU and Asia-Pacific countries. The definitive phase of CBAM commenced on January 1, 2026, and its implications for East Asian economies, particularly China and South Korea, are an ongoing focus for analysts, though no new significant actions or impacts have been reported in this immediate period.

EU Institutional Actions

• No major institutional actions in this period.

Key Bilateral Developments

• EU-China: No major developments in the last 48 hours regarding CBAM's impact on Chinese manufacturers or critical raw material diversification. China's Ministry of Commerce previously responded to CBAM's full implementation on January 1, 2026, by stating it would take "all necessary measures" against what it views as unfair trade restrictions.
• EU-South Korea: No major developments in the last 48 hours. South Korea's government has been actively preparing for CBAM's full implementation in 2026, with measures to support companies in carbon emissions calculation, reporting, and verification, as well as efforts to reduce carbon emissions.
• EU-Japan: No major developments in the last 48 hours. Japanese manufacturers selling into the EU are increasingly needing credible evidence of their electricity-related emissions due to CBAM, which became fully operational on January 1, 2026.
• EU-ASEAN: No major developments in the last 48 hours regarding critical raw material partnerships or green energy cooperation. The EU and Vietnam previously agreed in late January 2026 to boost trade and investment in critical minerals, semiconductors, and strategic infrastructure, aiming to elevate diplomatic ties.

Sector Analysis

Trade/Investment: The EU's Carbon Border Adjustment Mechanism (CBAM) entered its definitive phase on January 1, 2026, requiring importers to purchase and surrender CBAM certificates for covered goods, which include cement, iron and steel, aluminum, fertilizers, electricity, and hydrogen. This is expected to increase compliance costs for East Asian manufacturers, particularly in carbon-intensive sectors, though no new tariffs or significant shifts in investment flows were reported in the last 48 hours.
Defence/Security: No major developments.
Technology/Digital: No major developments.
Climate/Energy: No major developments in the last 48 hours regarding new green partnerships or critical raw material supply chain diversification efforts. The EU continues to seek diversification of critical raw material supply chains away from China, with Southeast Asian countries like Vietnam and the Philippines identified as key partners.

Implications for Analysts

• For Europe: Analysts monitoring EU policy should note the ongoing, albeit not immediately reported, challenges in meeting Critical Raw Materials Act targets due to continued import reliance and slow domestic scaling, as highlighted in a February 4, 2026, report by the European Court of Auditors.
• For Asia: Analysts monitoring Asia-Pacific dynamics should continue to observe how East Asian economies, particularly China and South Korea, adapt their industrial policies and carbon accounting practices in response to the full implementation of the EU's CBAM, which is expected to reshape trade flows over time.

Outlook

Stable
The absence of major reported developments in the last 48 hours suggests a period of stability, with East Asian countries continuing to adapt to the full implementation of CBAM and ongoing, longer-term efforts by the EU to diversify critical raw material supply chains and foster green energy cooperation.

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