Key facts
- EU's trade deficit with China has reached a 'tipping point,' according to European Commission President Ursula von der Leyen.
- The trade deficit amounts to €1 billion per day.
- Von der Leyen stated the situation is contributing to de-industrialization in Europe.
- The EU plans to use 'all tools at our disposal to rebalance our relationship' with China.
- Brussels is preparing for an October summit of EU leaders to discuss trade defense instruments.
European Commission President Ursula von der Leyen is set to deliver a stark warning about the EU's ballooning trade deficit with China, describing it as having reached a "tipping point" of €1 billion per day. In prepared remarks for her State of the Union speech on Wednesday, von der Leyen will articulate concerns that the deficit is contributing to de-industrialization across Europe. She plans to signal that the EU will employ a range of measures to rebalance the trade relationship, emphasizing that while dialogue with China is ongoing, concrete results are now expected.
Von der Leyen's remarks come as Brussels intensifies its engagement with Beijing, with high-level trade discussions scheduled. The EU is under pressure to demonstrate progress on protecting its industries from what it perceives as unfair competition from subsidized Chinese exports, with a key deadline approaching for an October summit of EU leaders. The Commission president stated that China's weaker domestic demand makes its need for the European market significant, suggesting a mutual interest in finding solutions.
While von der Leyen's speech did not detail specific actions, the EU's trade chief is expected to hold discussions with his Chinese counterpart, and a delegation of senior trade officials is slated to visit Beijing soon. The Commission president's prepared remarks included a firm stance: "Let me be clear: we will use all tools at our disposal to rebalance our relationship. Words are good. But deeds are better."