Germany’s ruling coalition has endorsed a comprehensive 34-point plan to revive the country’s struggling economy, which includes a commitment to adopt a more assertive stance against unfair trade practices, particularly those associated with China. The announcement, made on Thursday, marks a notable shift in Germany’s long-standing approach within the European Union, where it has often acted as a moderating influence on tighter trade measures targeting Beijing.

While the package did not explicitly mention China, Finance Minister Lars Klingbeil confirmed the government’s intent to protect domestic companies from unfair competition linked to the Asian economic powerhouse. The plan calls for enhanced trade defense tools at the EU level, including faster and broader application of anti-dumping and anti-subsidy measures across entire sectors. It also emphasizes the necessity of preventing any circumvention of these protections.

Juergen Matthes, head of international economic policy at the German Economic Institute, described the stance as “a substantial change” for Germany. He noted that these duties serve as “a country-agnostic instrument” aimed at ensuring a level playing field. Matthes referenced research from the Organisation for Economic Co-operation and Development indicating that China provides significantly greater subsidies to its industries than other advanced economies.

Beyond trade defense, the coalition’s package advocates for mandatory, case-by-case technology transfer conditions on investments originating from certain non-EU countries in strategic sectors and critical infrastructure. This measure reflects concerns over foreign influence and parallels China’s longstanding requirements for foreign firms to enter joint ventures in key industries. The package also supports accelerating the implementation of regulatory adjustments targeting e-commerce platforms, measures seen as primarily intended to address the growing presence of Chinese companies such as Shein and Temu.

However, some economists caution that tougher trade policies alone may be insufficient to restore the competitiveness of Germany’s industrial base. A recent report by the Kiel Institute indicated that only about one-third of Germany’s market share losses in external markets can be attributed to Chinese competition, with the remaining two-thirds linked to domestic structural issues. The report argued that broad tariffs poorly address these underlying weaknesses.

Former Kiel Institute vice president Rolf Langhammer has also expressed skepticism regarding the effectiveness of more aggressive trade measures, suggesting that such protection might only provide a temporary reprieve. He instead urged the EU to strengthen its position through alliances with other free-trade partners confronting similar challenges from China.

The German document stresses the urgency of “robust protection against unfair competition” through comprehensive and timely enforcement of protective trade policies at the EU level. It underscores the need to tackle socioeconomic disparities and prevent trade imbalances from worsening.

Chancellor Friedrich Merz emphasized this point, stating that his government aims to curb the growth of current trade imbalances. The developments precede an EU delegation planned for Beijing in October, with officials anticipating intensive negotiations during the summer as both sides seek to defuse escalating trade tensions.