The skewed trade imbalance risks decimating European industry, and makes the EU dangerously dependent on the communist state
China’s yawning trade overcapacity is a well-known problem in Brussels, as European industries find themselves unable to compete with the world’s manufacturing superpower – a structural advantage based on cheaper input costs and heavy state support by the governing Communist Party.
Making an unusual appearance at the annual conference of French business leaders, Ursula von der Leyen, the European Commission president struck an assertive tone, insisting on the need for dialogue but warning that the current trade deficit on the part of the EU – which amounts to almost €1 billion a day – cannot continue.
“When dialogue is not enough, we must be ready to make full use of our instruments,” she said, a reference to the bloc’s anti-coercion instrument, which it has never actually used. Brussels recently floated a “dedicated instrument” to diversify the EU’s critical supply chains away from Beijing.
In a bid not to trigger an open trade war, both sides have set up a joint forum to manage trade relations that the EU hopes will deliver “tangible results” by October.
