Key facts
- Goldman Sachs states China's competition in third markets hurts EU growth.
- This competition is a larger drag on EU growth than the bilateral trade deficit.
- Goldman Sachs anticipates a more assertive EU trade policy.
- The anticipated EU trade policy will be targeted.
Goldman Sachs has analyzed the impact of China's economic activities on European Union growth, concluding that increased competition in third markets is a more significant impediment than the bilateral trade deficit. The firm's assessment suggests that while the trade gap remains a factor, the indirect effect of China's expanding presence in global markets, particularly in sectors where European companies also compete, is a larger drag on EU economic expansion. In light of these findings, Goldman Sachs anticipates a shift in the EU's trade policy. The projected policy will be more assertive, indicating a stronger stance in international trade negotiations and enforcement, but also more targeted, suggesting a strategic focus on specific industries or trade relationships where the impact is most pronounced. This dual approach aims to effectively counter competitive pressures without resorting to broad, potentially counterproductive protectionist measures. The firm's outlook implies a proactive stance from the EU to safeguard its economic interests and maintain competitiveness in the global arena.