Chancellor Merz Orders Trade Proposals to Counter China

Chancellor Friedrich Merz has directed his cabinet to develop proposals to address trade imbalances between the European Union and China. The move follows intense pressure from German industry leaders who cite massive price pressure and a widening trade deficit, which reached 89.3 billion euros last year.

Business representatives, including the German Chamber of Commerce and Industry and the Federation of German Industries, argue that state subsidies and unfair competition from China are undermining European markets. German automakers, specifically Volkswagen, face increasing competition from Chinese brands like BYD in both domestic and international markets. Industry leaders have called for a level playing field and the faster application of trade policy instruments to safeguard European suppliers.

Merz has signaled support for the European Union to prepare a package of defensive measures if trade talks between the bloc and Beijing in October fail. While some industry associations express concern over potential Chinese retaliation, there is a growing consensus that inaction poses a greater risk to the German economy.