What happened
The European Union is working on new trade instruments to counter its widening trade deficit with China, which reached 1 billion euros per day last year. European Commission President Ursula von der Leyen stated that the current trade imbalance is unsustainable and that new measures are needed to address the issue.
China's exports to the EU surged by 35% in September, resulting in a $35 billion trade surplus. The EU has secured China's commitment to curb the shipment of hybrid cars to the bloc and improve market access for European products. However, von der Leyen emphasized that progress in the auto industry alone cannot address the massive trade deficit.
The European Commission plans to present a new instrument, dubbed Diversify EU, in December. This tool will help European companies reduce their dependence on single suppliers and address structural imbalances in trade with China. The commission will also deploy existing safeguard measures, including tariffs and quotas, in response to calls from EU industries for action.
