World Economy

EU Seeks Trade Balance With China, Merz Says, Amid Overcapacity Concerns

FW Desk News

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Wednesday, October 21, 2026

German Chancellor Friedrich Merz stated the European Union aims to establish equilibrium in its commercial relationship with China rather than escalate trade tensions. The bloc confronts challenges including surplus production capacity and currency valuation concerns from Beijing. Merz emphasized that the EU's approach seeks to protect European interests while maintaining diplomatic channels. The chancellor framed the approach as aspirational rather than confrontational, signaling Brussels wants to negotiate revised trading terms with China. Merz's remarks suggest the bloc may pursue targeted measures to counterbalance market distortions without triggering a trade conflict.

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