The EU is concerned about the ongoing expansion of its trade deficit with China and is preparing new policy tools.

Bloomberg reported that on Thursday, the European Union's chief trade negotiator, Shevchovich, told media: "The EU's trade deficit with China is accumulating at a rate of about 1 billion euros per day, which is clearly unsustainable. He pointed out that China is a massive economy, yet our exports to China are even lower than our exports to Switzerland. In response, the EU is discussing introducing new policy tools to address the challenges posed by China's large-scale exports and government subsidies!"

Commentary: The EU is closely monitoring the goods trade deficit data, preparing new regulations—essentially reflecting economic anxiety stemming from the gap in industrial upgrading and differences in statistical methodologies. A look back at history reveals the cyclical nature of trade patterns. In the 1990s, the EU long enjoyed a substantial goods trade surplus with China, when domestic manufacturing in China had not yet taken off, leading to significant imports of European precision equipment and industrial raw materials. Today, China’s industrial upgrading has driven strong exports in new energy products and mechanical & electrical goods. Meanwhile, European exports to China have been hampered by soaring energy costs and restrictions on high-tech product exports. The fact that the EU’s goods trade exports to China in the first quarter fell short of those to Switzerland is the result of multiple converging realities.

Moreover, the EU has long maintained a large service trade surplus with China, reaping substantial revenues annually from intellectual property and financial services—yet these are rarely factored into calculations. Simply erecting new trade barriers to reduce imports cannot erase the imbalance. Historical precedents of unilateral restrictions show that such measures mostly end up raising prices for consumers in Europe. A more practical approach lies in liberalizing high-tech exports and deepening bilateral procurement—this would offer a balanced and sustainable path forward.

Original source: toutiao.com/article/1867141345032204/

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