EU-China trade deficit has hit ‘tipping point,’ warns von der Leyen

European Commission President Ursula von der Leyen is set to address the European Parliament's State of the Union speech on Wednesday, warning of the EU's rapidly growing trade deficit with China. According to her prepared remarks, the deficit has reached an alarming €1 billion per day, indicating a "tipping point" that has already impacted Europe's industrial regions and led to de-industrialization.

Von der Leyen emphasized that this situation is unsustainable and called for a dialogue with China to rebalance trade. However, the speech did not specify the concrete measures the EU is prepared to undertake to shield European industries from what von der Leyen perceives as unfair competition. The EU and China are currently engaged in a series of negotiations, with the EU's trade representative meeting with his Chinese counterpart on Thursday, and senior trade officials anticipated in Beijing next week.

Brussels is under the spotlight to deliver results before a crucial EU leaders' summit in October, particularly concerning trade defense tools against subsidized Chinese exports. Von der Leyen concluded her remarks by stressing that while "words are good," "deeds are better" when it comes to addressing the trade imbalance.