The EU raises the tone with China and agrees on a legal tool against the trade deficit

BrusselsA change of direction in the European Union regarding China. The trade deficit with China has long concerned the leaders of the European bloc, but the consensus to combat it has never been so broad. The leaders have agreed at the European Council this Thursday and Friday to explore new trade strategies with the Asian giant, and have asked the European Commission to put on the table a legal tool to defend itself against Beijing, according to diplomatic sources.

However, European leaders do not want to start a trade war with China or, in any case, break off trade relations with it. They know it is a key partner. No member state is interested in Beijing turning off the tap of critical exports for European industry or applying tariffs to sectors that export to the Asian giant.

Be that as it may, the majority opinion among member states – led by France – has prevailed, arguing that new legal tools are needed to protect themselves agilely and quickly against practices by China that the EU may consider "unfair," such as large public subsidies to certain sectors or massive price reductions. At the last minute, the industrial locomotive of the bloc, Germany, has also joined, which until before this week's summit was always in the group of countries that wanted to strengthen ties with China.

The growing trade deficit, however, has led more and more countries to want to toughen their rhetoric against Beijing. The clearest exception is Spain. Pedro Sánchez has once again swum against the tide at the European summit and is the one who has most loudly and clearly defended good relations with Xi Jinping's regime. "We need friends, balanced relationships, we need to be pragmatic and build bridges with large economies and with potential allies such as China," he assured this Thursday at the doors of the leaders' meeting. Thus, sources from Moncloa defend that the tools currently available to the European club are already good enough and say that "there is no magic instrument" that allows resolving a problem that affects so many sectors of the economy.

It should be remembered that the EU's trade deficit with China is 350 billion euros annually and already affects all member states. The Twenty-Seven are increasingly clear about the diagnosis: the situation is "unsustainable". On the other hand, European leaders have also agreed to continue diversifying trade and reducing critical dependencies on powers such as China and the United States, but also to ensure that trade exchanges are conducted under "fair conditions".