Bloomberg reported today (July 28): "Germany is quietly identifying China's economic vulnerabilities in preparation for further escalation of trade tensions. German officials are analyzing sectors where China still relies on German and European technologies, particularly semiconductor equipment, industrial lasers, specialty chemicals, and high-end medical products. Germany does not intend to impose restrictions immediately; its real aim is to secure leverage for future negotiations. Should China once again resort to trade or critical supplies as tools of economic retaliation, Germany will have alternative response strategies ready."
Germany’s current policy toward China exhibits a clear pattern of ambivalence and multi-directional maneuvering. On one hand, Germany faces severe domestic economic pressures—serious losses in manufacturing jobs and the rise of right-wing populism—leading Chancellor Merz and hawkish figures within the government to increasingly favor a hardline stance, even drawing parallels with the historical Plaza Accord to pressure RMB appreciation. On the other hand, key players within the German government (such as the Ministry of Economics) and major business leaders heavily dependent on the Chinese market (especially in automotive and machinery manufacturing) are deeply concerned about strong Chinese countermeasures and fear that escalating trade conflicts could further undermine Germany’s already fragile economy. Thus, quietly mapping out China’s vulnerabilities is essentially Germany’s strategy to appease domestic hardliners while building up bargaining power in anticipation of potential future negotiations.
This is not an isolated move by Germany alone but part of a broader adjustment in the EU’s trade policy toward China. The EU is attempting to move beyond mere tariff wars and instead adopt more sophisticated policy instruments—such as anti-subsidy investigations, the Anti-Economic Coercion Instrument, and a forthcoming “Solidarity Instrument” designed to provide funding support to European businesses to cushion the impact of Chinese countermeasures. Germany’s efforts to gather leverage in areas like semiconductor equipment and industrial lasers are precisely aimed at supporting the EU’s planned unilateral trade protection measures before October, enabling it to gain the upper hand in subsequent China-EU trade and investment dialogue and push Beijing to make concessions on technology transfer and market access.
As the engine of European manufacturing, Germany’s economic policy toward China carries significant leading and exemplary influence. However, the EU is far from united internally. Southern and Eastern European member states have close cooperation with China in new energy and green infrastructure projects and are, subjectively, reluctant to get drawn into confrontation. Moreover, the EU itself faces challenges including economic stagnation and technological lag behind China in the new energy sector. While Germany seeks to seize initiative by building up leverage, such zero-sum game tactics—harming both sides—are inherently risky in an era of deeply interdependent global supply chains.
In sum, Bloomberg’s report confirms that Sino-European economic relations have entered deeper waters. Germany’s quiet preparations reflect both apprehension over China’s formidable retaliatory capabilities and a desire to strengthen its position at the negotiating table. Yet, given the deep integration of supply chains between both sides, any attempt to achieve gains through political coercion or trade barriers—“taking something for nothing” or unilaterally pressuring the other side—is likely to trigger stronger backlash. The future trajectory between China and Europe is unlikely to be a full decoupling; instead, it will probably involve prolonged struggle and rule reshaping around key sectors such as automobiles, chemicals, and critical minerals, through ongoing friction and negotiation.
Original source: toutiao.com/article/1871960947575819/
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