The European Union will use all available tools to reduce its trade deficit with China, which according to Ursula von der Leyen, President of the European Commission, has become an "intolerable" situation. The trade deficit reached 1 billion euros (equivalent to 1.15 billion dollars) per day last year, causing deep concern among European leaders.
Impact of Trade Deficit on the European Economy
Ursula von der Leyen emphasized in her speech to the European Parliament that this economic imbalance has reached a point where Europe is experiencing a "second shock from China" through deindustrialization processes. This trade deficit not only harms the European economy but also leads to job losses and a decrease in domestic production.
Read more: The U.S. Congress and the Implications of Inflation on the Dollar
European leaders had asked the European Commission in June to achieve tangible results from talks with China and ensure that the bloc has all necessary tools to defend its interests. Maros Sefcovic, the European Trade Commissioner, who is leading the negotiations, has also stated that his goal is to achieve tangible results by October.
Future Proposals and Actions
In her speech, Von der Leyen referred to the EU's dependence on China for many important minerals, especially rare materials. She stated, "We must act urgently and increase our reserves." To this end, the EU plans to establish a new European company for critical raw materials that will help the bloc acquire and store what it needs.
Von der Leyen also noted, "Let’s be clear: we will use all available tools to adjust our relations. Good words are fine, but action is better." These statements reflect the EU's serious determination to change the current situation and improve its economic conditions against China.
Ultimately, this action could lead to major changes in the way the EU trades and its economic relations with China, creating new prospects for economic and trade cooperation in the future.
Read more: South Korea Enhances Its Relations with Kazakhstan and Expands Cooperation with Turkmenistan · Wholesale Prices in Germany Increased by 6.8% in August 2023
