As the EU moves to impose steep tariffs on Chinese electric vehicles, China finds itself at a pivotal juncture in its evolving trade relationship with Europe.

The European Union wants a level playing field with China on car tariffs and is negotiating with Beijing on mechanisms such as price commitments or investments in Europe as a solution, European Commission chief Ursula von der Leyen said on Monday.

China has threatened to raise tariffs on large-engine vehicles and said it will start collecting duties on cognac, in moves that would hit the EU’s two largest economies.