EU chief von der Leyen vows 'all tools' to slash €1B-a-day China trade deficit
Warning that the bloc's goods trade deficit with Beijing has hit a "tipping point" of 1 billion euros a day, EU President Ursula von der Leyen vows aggressive action to counter deindustrialization
European Commission President Ursula von der Leyen has warned that the European Union is prepared to deploy every instrument at its disposal to tackle what she termed an "unsustainable" trade imbalance with China.
Von der Leyen said that the imbalance, with a goods trade deficit of €1 billion ($1.15 billion) a day last year, had reached a tipping point and that Europe was already suffering from the second China shock through de-industrialization.
EU leaders called on the European Commission in June to produce results from dialogue with China and to ensure the bloc has all the instruments it needed to defend its interests. European Trade Commissioner Maros Sefcovic, leading the talks, said he wanted to achieve tangible results by October.
Von der Leyen said in her 'state of the Union' address to the European Parliament that it was in both sides' interests to work together to find a solution.
"Let me be clear: we will use all the tools at our disposal to rebalance our relationship. Words are good. But deeds are better," she said.
Von der Leyen also highlighted the EU's reliance on China for many critical minerals, notably rare earths.
"We need to urgently procure and build up our reserves," she said, adding the EU would establish a new European Corporation on critical raw materials to help the 27-nation bloc obtain and stockpile what it needed.
Speaking to the European Parliament, von der Leyen stressed that the bloc's goods trade deficit with Beijing—running at roughly 1 billion euros ($1.15–$1.18 billion) a day has reached a critical juncture.
Stressing that fears of a "second China shock" driving European deindustrialization are no longer hypothetical, she asserted that the threat is already a reality.
While trade dialogue remains open, von der Leyen emphasized that negotiations must deliver concrete results, stating, "Words are good. But deeds are better... We will use all the tools at our disposal to rebalance our relationship."
The stark warning signals a potential escalation in trade defense measures, which could include stricter anti-subsidy tariffs, safeguard investigations, and heightened scrutiny of Chinese industrial exports.
Beyond manufactured goods, von der Leyen underscored Europe's dangerous over-reliance on China for critical raw materials and rare earths, announcing plans to urgently procure supplies and build up strategic reserves via a new European Corporation.
The pivot from open-ended diplomatic dialogue to an explicit ultimatum sets a hard deadline for Beijing to address market access and structural imbalances or face unilateral European trade interventions.
