EU will use all tools to cut China trade deficit, von der Leyen says

European Commission President Ursula von der Leyen assured the European Union will employ every available means to diminish its unsustainable trade deficit with China, she announced on Wednesday. The imbalance, marked by a daily goods trade deficit of €1 billion, reached a critical juncture last year, and Europe is already enduring the consequences of the second China shock through deindustrialisation.

In June, EU leaders urged the European Commission to produce results from dialogue with China and ensure the bloc has all the tools necessary to protect its interests. European Trade Commissioner Maros Sefcovic, who is spearheading the negotiations, expressed his desire to achieve tangible results by October.

In her 'state of the Union' address to the European Parliament, von der Leyen emphasized that it is in both sides' best interests to collaborate on resolving the issue. She stated firmly, "We will use all the tools at our disposal to rebalance our relationship. Words are good. But deeds are better."

Furthermore, von der Leyen highlighted the EU's dependence on China for crucial minerals, particularly rare earths. To address this vulnerability, the EU must urgently acquire and stockpile reserves. She added that the EU would establish a new European Corporation on critical raw materials to facilitate the 27-nation bloc in obtaining and storing the necessary resources.