Key facts
- German Chancellor Friedrich Merz stated the EU must defend itself against unfair trade practices.
- Merz's remarks suggest increased receptiveness to the European Commission's proposals for a tougher stance on China.
- The EU is considering measures to address China's industrial overcapacity and subsidized exports.
- Germany's trade deficit with China was €90 billion in 2025.
- EU leaders will discuss the bloc's long-term budget at an upcoming summit.
German Chancellor Friedrich Merz stated that the European Union must defend itself against unfair trade practices, signaling a greater openness to recent European Commission proposals for a tougher approach to China. Speaking ahead of an EU summit, Merz emphasized that while Europe benefits from open trade, it will not stand idly by when other countries fail to comply with common rules, thereby distorting competition.
Berlin's stance appears to be shifting due to sluggish growth and an industrial downturn exacerbated by Chinese competition, which has led to a significant trade deficit and job losses in Germany's manufacturing sector. The European Commission is considering measures such as an overcapacity instrument to address state subsidies and additional trade actions against imports harming local industries.
EU leaders are also set to discuss the bloc's long-term budget, with Germany advocating for significant reductions. French President Emmanuel Macron is planning a video call with G7 leaders and China to address "macroeconomic imbalances."