MNI: Germany Ready For Tougher Stance On China - EU Officials

There is growing alignment between European states in favour of a more robust approach on trade towards China despite a difference in tone between Germany and more hawkish French rhetoric, EU officials told MNI, ahead of German Chancellor Friedrich Merz’s visit to China this week.

"EU-China trade policy is no longer divided between 'hawks' and 'doves,'" Clyde Kull, a former Estonian ambassador to France and Germany, told MNI in an emailed exchange. 

"Two schools are emerging, French and German, that differ in style and sequencing, but increasingly converge on substance," he said, adding that the European Commission will have to bridge these two views.

The EU will explicitly address structural imbalances, and escalation towards "managed economic confrontation" is possible if dialogue fails, Kull said, contrasting this approach to the de-escalation with China pursued by countries such as the UK and Canada. (See MNI: China Advisors See Rising Trade Frictions With EU)

MERZ CHINA VISIT

Merz's visit to China this week will be a first opportunity to see what his new, more robust approach of "Principled Realism" towards EU-China trade relations means in practice, sources added. 

But, whether Germany will be ready to support more effective EU trade defence tools to protect strategic industrial sectors including chemicals and autos remains an open question. (See MNI INTERVIEW: Battle Lost For EU Car Industry - Confidustria)

Dissatisfaction among member states over the sluggishness of anti-dumping measures and the yet-unused anti-coercion "bazooka," due to the need for long consultations and investigations, means that this will remain a key topic for debate in 2026, officials said.

SUBSTANTIVE AGREEMENT

Germany has generally taken a softer rhetorical line towards Beijing, while France has been much more outspoken in its reaction to China's export surge, which has become particularly pronounced as the yuan has depreciated in line with its soft peg to the dollar. However, reports that Berlin had rebuffed Beijing’s calls for a free trade agreement with the EU and to revive the Comprehensive Agreement on Investment support the idea Europe is ready to take a more robust approach, officials said.

The investment agreement had been blocked by the European Parliament in March 2021 following a spat over human rights. 

An informal meeting of trade ministers in Nicosia last week saw several EU states taking a firmer approach on China, following news that the latter's trade surplus with the bloc had climbed to EUR360 billion in 2025.

A recent report from French government advisers called for either a 30% tariff hike on Chinese imports into the EU or a 30% depreciation of the euro. This proposal is unlikely to find much support among other EU states, not least because an across-the-board tariff against one country would violate WTO rules with which Germany and the Commission are keen to comply, particularly in the run-up to a WTO Ministerial Meeting in late March.