Why Europe is Facing Up to the China Shock Now
The European Union is intensifying its economic response to a widening trade deficit with China, which has reached record levels. Brussels has initiated multiple investigations into Chinese imports, citing concerns over overcapacity and the erosion of the European manufacturing base.
Why it matters
The shift in EU trade policy marks a significant escalation in global economic tensions and reflects a strategic pivot to protect domestic industries from Chinese competition.
A number is haunting the European Union: 1 billion euros a day. That’s the rate at which the bloc’s trade deficit with China in goods is widening, reaching 31.9 billion euros per month ($37.3 billion) in April this year. As imports from China surge and major European industries hollow out, solving the trade challenge has shot to the top of the EU’s priority list.
Since the beginning of June, Brussels has opened nine new investigations against Chinese imports. The European Council met in mid-June to debate new mechanisms to meet the economic challenge. And at the end of the month, European and Chinese trade officials set an October deadline to develop a joint plan of action.
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