EU Seeks New Trade Balance With China To Cut Deficit

Friedrich Merz stated that the European Union is seeking a new balance in trade with China to address an annual trade deficit exceeding 300 billion euro. He attributed this imbalance to Chinese overcapacities, high automotive subsidies, and an artificially undervalued currency.

Merz noted that the EU possesses a toolbox of instruments to defend its industry against unfair practices, though he emphasized a preference for fair trade within a rules-based order under the World Trade Organization. He clarified that the EU is not seeking a trade conflict but is taking account of its own interests.

Recent developments include an agreement by China to reduce the number of cars imported into the EU following talks between a European commissioner and Chinese officials. Simultaneously, the president of the European Central Bank and the head of the Eurogroup have initiated dialogues regarding currency and exchange rates to further address the trade imbalance.