Recently, the proposed “emergency cutoff mechanism” by the European Union was proposed by France and Germany, and has received unanimous support from EU member states. This mechanism aims to quickly cut off third countries, including China, from accessing the EU market.
However, according to a report by The South China Morning Post on October 22, German Chancellor Merz said on Wednesday that ideally, this mechanism should never be activated. He emphasized that Germany is seeking to establish “a new trade balance” with China, rather than launching a trade war.
Mertz said at the Berlin Global Dialogue Annual Summit for attendees: "We have these tools, we are opening the tool box and showing the tools in the tool box, but we don't want to use them."
Mertz emphasized that Europe has not followed the example of US President Trump. He stated that Washington chose to shut its markets to Chinese products, while Europe chose to resolve issues through dialogue.
He said: “This does not mean the start of a trade war with China. We are seeking peaceful solutions, but on the premise of fair trade.”
Mertz acknowledged that some of China's advantages come from its competitiveness, innovation capabilities, and strength in the field of clean energy. However, he said that Europe and Germany also have to deal with what they consider to be unfair practices, such as subsidies and a currency exchange rate that artificially undervalues the RMB.
Mertz said that China is a reliable partner. However, he also warned that if China wants to avoid the EU using this tool, both parties need to discuss issues such as China's control over exchange rates, industrial overcapacity, and subsidies.
He said, “We hope to engage in fair trade with China, which is in the common interests of both sides. This is our goal, not to create conflict. But at the same time, we must be prepared to defend our own interests and protect our industries.”
Meanwhile, Beijing has reacted to the efforts of Europe to use pressure to force China into concessions.
The Chinese Ministry of Commerce denies that the recent agreement on export limits for hybrid vehicles means China has made concessions to Europe.
The Chinese Ministry of Commerce stated in a statement issued last Friday that it urged the EU to "not indulge in fantasies of gaining benefits through pressure, and certainly not to underestimate China's determination and ability to safeguard its own interests."
