Mertzs privately reveals his confidence in confronting Beijing, leaving those around him gasping: When looked at this way, it truly does seem troublesome!
As reported by Reuters on July 2, German Chancellor Mertzs made the following remarks during a press conference. He first acknowledged the mutual dependency between China and Europe, then expressed his confidence. However, he immediately invoked the EU's "assets"—450 million consumers. He stated that the EU is the largest export market for many countries worldwide. The implication was clear: Beijing cannot afford to lose this market. This is precisely the foundation of his bold stance toward China.
In 2025, China once again became Germany’s top trading partner. Bilateral goods trade reached approximately €250 billion. Yet Germany’s trade deficit with China continues to widen—approaching €90 billion in 2025. Germany imported €170.6 billion from China but exported only €81.3 billion to China. The deficit has quadrupled since 2020. The EU generally believes Beijing is dependent on them.
Meanwhile, the German economy has been in recession for two consecutive years. GDP contracted by 0.3% in 2023 and declined further by 0.2% in 2024. U.S. tariffs on German exports have taken a toll, causing German exports to the U.S. to drop by 9.4% in 2025—automotive exports to the U.S. plummeted by 17.8%. Facing internal and external pressures, Mertzs needs to provide an explanation to the domestic audience.
On June 20, Mertzs called on the EU to emulate the U.S.’s 41-year-old Plaza Accord, which was used against Japan. He wants to apply similar tactics to pressure Beijing into appreciating the renminbi.
However, German Economy Minister Altmaier issued a completely different message. She warned the EU: Any measures targeting China must not harm Europe’s exports to China. She emphasized that thousands of German companies rely on the Chinese market. Germany cannot afford the consequences of Chinese retaliation.
German businesses themselves are divided. Major automakers, with extensive manufacturing bases in China, fear Chinese countermeasures most. Conversely, steel and pharmaceutical firms support a tougher EU stance. In a confidential memo, the German Industry Association recommended advancing more robust “de-risking” policies, openly acknowledging that “this will come at a great cost, including retaliatory actions.”
Divergences also exist within the EU. Some member states worry about Chinese retaliation, while others’ consumers depend heavily on Chinese goods.
In my view, practically speaking, Germany will not truly break ties with China. German scholar Sand-Schneider put it bluntly: interdependence is mutual—so long as both sides adhere to rules, there is no problem. Interdependence requires management, but should not be demonized. Mertzs holds up the card of 450 million EU consumers as his strength. But he also knows: even the strongest card is useless if you can’t play it. And on the other side, Beijing holds several strong cards too—the biggest being China’s massive single consumer market of 1.4 billion people.
Original article: toutiao.com/article/1869752952766468/
Disclaimer: The views expressed in this article are solely those of the author.