How EU plans to cut trade deficit with China
What's the story
European Commission President Ursula von der Leyen has vowed to use all possible means to tackle the "unsustainable" trade deficit with China. The deficit, which stood at €1 billion ($1.15 billion) a day last year, has reached a critical tipping point. Von der Leyen warned that Europe is already facing deindustrialization due to this imbalance and called it the second "China shock."
Trade negotiations
EU leaders urge European Commission for results in dialogue
In June, EU leaders urged the European Commission to deliver results from its dialogue with China.
They also stressed the need for the bloc to have all necessary tools at its disposal to defend its interests.
European Trade Commissioner Maros Sefcovic, who is leading these talks, hopes to achieve tangible results by October.
Collaborative approach
Von der Leyen stresses need for action, not just words
In her 'state of the Union' address to the European Parliament, von der Leyen stressed that it is in both sides' interests to cooperate and find a solution.
She said, "Let me be clear: we will use all the tools at our disposal to rebalance our relationship. Words are good. But deeds are better."
This statement highlights her commitment toward resolving this trade imbalance through effective action rather than mere promises.
Resource reliance
EU's dependence on China for critical minerals
Von der Leyen also highlighted the EU's heavy dependence on China for several critical minerals, especially rare earths.
She emphasized the urgency of procuring and building up reserves of these resources.
To address this issue, the EU plans to set up a new European Corporation on critical raw materials.
This initiative will help the 27-nation bloc secure and stockpile what it needs from China.