In a report by Bloomberg, German Chancellor Friedrich Merz mentioned at the Berlin Global Dialogue Conference on October 21 that the European Union is facing “unfair practices” from Beijing in trade, thus looking to prepare countermeasures. Merz emphasized the need for self-defense against China’s trade surplus with the EU exceeding €300 billion annually. The EU aims for fair trade standards in seeking peaceful resolutions to the imbalance issue between China and Europe.
Merz and French President Emmanuel Macron jointly proposed two new EU measures. One focuses on diversifying supply chains to reduce reliance on individual countries, while the other involves swift exclusion of massive imports from a non-EU country flooding the European market with cheap products.
Merz warned against countries weaponizing trade dependencies for advantages through unfair subsidies, overcapacity, aggressive pricing, or currency manipulation, stating that responses must be anticipated. The German media outlet Süddeutsche Zeitung published a commentary titled “Europe Needs a Cold Turkey,” highlighting the increasing challenges posed by Beijing’s export control list and Europe’s high economic dependence on China. The commentary stressed the urgent need for Europe to reduce reliance on Chinese goods, regardless of the costs, to maintain economic autonomy and withstand political pressures from Beijing.
According to data released by China’s National Bureau of Statistics on the 19th, China’s global trade surplus may surpass last year’s record of $1.2 trillion. Exports in September grew by 36%, contributing significantly to this year’s trade surplus, which reached $938 billion from January to September.
Fortune magazine noted that the growth in Chinese exports this year was predominantly driven by high-tech products such as semiconductors, along with exports of hybrid and electric vehicles. China’s domestic manufacturing capacities in industries like solar energy and electric vehicles, backed by substantial government subsidies, led to a surge in production amid weak domestic consumption. Following US tariff increases, China redirected its exports to other markets, including Southeast Asia, Latin America, and Europe.
In the first nine months of this year, China’s exports to the EU rose by 16%, with the EU’s trade deficit with China exceeding €1 billion daily. EU member states are considering implementing additional restrictions on Chinese exports.
At a recent European Commission meeting, President Ursula von der Leyen proposed a “kill switch” mechanism as a new tool for the EU to address trade disputes with China, in addition to tariffs and other trade restrictions. This tool is set to be available before the year-end in extreme circumstances, as reported by Bloomberg. Lithuanian President Gitanas Nauseda mentioned the possibility of extreme measures, including a complete shutdown of the European market to Chinese goods, in response to unfair trade practices by China.
These developments reflect escalating tensions between the EU and China, as both sides position themselves for potential trade conflicts amid ongoing global economic challenges.