Von der Leyen warns EU ready to deploy full trade defences against China

European Commission President Ursula von der Leyen warned on Thursday that the European Union stands ready to make full use of all its trade defence mechanisms should negotiations with China fail to produce a breakthrough on the bloc's record trade deficit. Her remarks were addressed to Medef, the French business organisation.

Relations between Brussels and Beijing have remained tense since talks began last June. Over the summer, China barred its companies from taking part in EU antitrust investigations, while the Commission has continued launching new probes into suspected dumping of Chinese goods in the European market.

Deficit hits a billion euros a day

Von der Leyen said dialogue with China remains necessary but must yield actual results, otherwise the EU must be ready to use its full toolkit. She noted that cheap Chinese imports into the EU have risen 45% over five years, and that 30 trade defence investigations have been opened in the past year alone — nearly three times the historical average. The EU's trade deficit with China has now reached roughly €1 billion a day, and the Commission has set October as the deadline for reaching a deal with Beijing.

She stressed that China remains a key economic partner and that the EU's approach is one of derisking rather than decoupling, but added that partnership does not mean accepting permanent imbalances. Von der Leyen also pointed out that every EU member state currently records a trade deficit with China.

The 'trade bazooka' option

In June, EU leaders gave von der Leyen a mandate to act to rebalance the relationship, through both dialogue and the use or review of defence mechanisms. Among these is the so-called anti-coercion instrument, sometimes nicknamed the 'trade bazooka', which could allow the EU to impose tough measures such as restricting access to public procurement or removing intellectual property rights. However, using it requires the backing of a majority of member states, and it remains unclear whether that support could be secured while some EU countries continue pursuing bilateral trade and investment ties with China.