August 27, 2026 (Paris, local time)

At the French Entrepreneurs Conference (REF), an annual business summit hosted by Medef, the French employers’ association, European Commission President Ursula von der Leyen delivered a public speech:

“Our trade deficit with China has now reached nearly €1 billion per day. China controls critical links in our supply chains. We depend on China for over 80% of many key raw materials, and in some rare earth elements, this dependence reaches as high as 90%. We have already seen how such dependencies can be leveraged as instruments of pressure. When dialogue falls short, we must be ready to fully deploy our tools.”

The recent flurry of anti-subsidy and anti-dumping investigations launched by the EU against China, coupled with von der Leyen’s remarks at the French Entrepreneurs Conference, has brought the escalating tensions in Sino-European economic and trade relations squarely into the open. This statement is not only a response to anxieties within Europe’s domestic manufacturing sector but also a clear signal of the EU’s strategic shift from “win-win cooperation” toward “defensive competition” in its approach toward China.

Von der Leyen’s speech began with striking data intended to underscore the “severity of the problem.” She highlighted that the EU’s goods trade deficit with China is approaching €1 billion daily—equivalent to over €360 billion annually—and that all 27 member states have, for the first time in history, recorded trade deficits in goods with China. At the same time, she emphasized the EU’s extreme reliance on China in key raw materials and rare earths (over 80% to 90%), directly characterizing this commercial supply chain dependency as a potential geopolitical “tool of pressure.” This logical framework aims to provide legitimacy and urgency for the EU’s subsequent tough measures.

Although von der Leyen’s figures are indeed alarming, her argument displays obvious one-sidedness and double standards.

She deliberately focuses solely on the “goods trade deficit,” while sidestepping the fact that the EU has long maintained substantial surpluses in service trade areas such as intellectual property rights and financial services vis-à-vis China—e.g., a surplus of $48.3 billion in 2025.

Trade deficits are fundamentally a natural outcome of differences in industrial development stages and global division of labor. China’s rise in sectors like new energy stems from economies of scale and advantages in industrial chain integration, whereas Europe faces challenges such as high energy prices and industrial hollowing out. Blaming China for Europe’s own structural weaknesses—and even labeling China’s lawful export controls (such as those on dual-use rare earth materials) as “weaponization” of pressure—is a classic case of pre-judging the issue.

The core purpose behind von der Leyen’s statement is to raise the stakes ahead of upcoming Sino-European trade negotiations. She explicitly stated: “When dialogue falls short, we must be ready to fully deploy our tools.” The “tools” here include anti-subsidy investigations, the Foreign Subsidies Regulation (FSR), and the Critical Raw Materials Act—trade defense mechanisms frequently employed by the EU in recent years. This “maximum pressure” posture seeks to use political leverage to force China to make concessions on market access and industrial policy, thereby easing competitive anxiety among European manufacturers.

Despite the hardline signals sent by Brussels leadership, consensus on China policy remains far from unified across the EU, which means its “toolbox” will struggle to be fully implemented.

The EU’s 27 member states are not a monolithic bloc. France leans toward aggressive trade protectionism (e.g., invoking the “anti-coercion instrument”), while countries like Germany—highly dependent on Chinese markets and supply chains—remain cautious, fearing retaliatory actions from Beijing that could harm their automotive and high-end manufacturing industries.

Experts from the European Council on Foreign Relations point out that Europe’s real problem is not “dependence,” but the lack of viable alternatives. In the short term, Europe cannot replicate China’s complete industrial chain in fields like rare earth refining, photovoltaics, and lithium batteries at comparable cost and technological levels. If it forcibly employs trade sanctions to decouple and break supply chains, the first to suffer rising inflation and skyrocketing production costs will inevitably be Europe’s own industrial competitiveness.

Von der Leyen’s speech is a quintessential example of political rhetoric, reflecting Europe’s deep-seated anxiety following the erosion of its traditional economic advantages. The EU attempts to politicize and securitize economic issues—but constrained by profound internal interest divisions and objective supply chain barriers, this adversarial “de-risking” strategy will not resolve Europe’s structural challenges. Instead, it may further entrench its industrial decline. Given the deep interdependence between China and Europe, packaging economic interdependence as a security threat ultimately leads only to mutual loss.

Original source: toutiao.com/article/1874747864889475/

Disclaimer: The views expressed in this article are those of the author(s) alone.