German Chancellor Friedrich Merz announced on Wednesday that the European Union intends to strengthen measures to protect its industries from what he described as "unfair" trade practices by China. Speaking at a conference in Berlin, Merz emphasized the need for a balanced trade relationship but made clear that the EU must be prepared to defend its economic interests if necessary.

Merz highlighted several concerns about China's trade approach, pointing to industrial overcapacity, substantial subsidies for certain sectors, and advantages stemming from an artificially undervalued currency. These factors, he said, have increasingly challenged German manufacturers in key industries including automotive, chemicals, and electronics. Germany, which has historically maintained a significant trade surplus globally and with China, has recently faced headwinds from rising domestic production costs and tariffs imposed by the United States.

“We want to have fair trade with China in our joint and mutual interest,” Merz said, while stressing the necessity of protecting German and European industries. He affirmed that recent discussions between EU officials and China have yielded some progress, citing an agreement to limit the number of Chinese cars entering the European market. However, he rejected the notion that these developments signal the start of a trade war, framing them instead as steps toward a more equitable trading environment.

The EU is preparing a new set of trade defense instruments aimed at countering practices that create imbalanced benefits. “In sustainable trade relations, one side shouldn’t profit at the expense of the other,” Merz stated. He noted that China maintains a substantial trade surplus with the EU, exceeding 300 billion euros ($337 billion) annually. While acknowledging China's strengths—such as the emergence of competitive companies and advanced research capabilities—Merz underscored the need to address structural challenges within Europe alongside the difficulties posed by China’s trade policies.

Merz’s announcement comes ahead of his upcoming trip to Asia, where he will visit Singapore, Japan, and South Korea. Meanwhile, German President Frank-Walter Steinmeier is set to travel to China next week. Steinmeier’s visit, largely ceremonial in nature, will include a planned meeting with Chinese President Xi Jinping, marking the first visit by a German president to China since 2018. The visits reflect ongoing efforts to manage the complex economic relationship between Germany, the EU, and China amid rising global trade tensions.