German government pledges to defend trade, signalling tougher China stance

Germany’s ruling coalition has pledged to take a tougher line on defending trade at the continental level, signalling a potential shift by a country long seen as the European Union’s main brake on stronger action against China.

The pledge formed part of a 34-point package to revive Germany’s ailing economy that German Chancellor Friedrich Merz’s coalition agreed to on Thursday. While the document did not mention China, German Finance Minister Lars Klingbeil said the government was adopting a tougher stance towards Beijing and would protect companies from unfair trade practices.

“We do not want trade imbalances of the current magnitude to arise or grow further,” Merz said while presenting the plans in Berlin.

Juergen Matthes, head of international economic policy at the German Economic Institute, described it as “a substantial change of the German position”.

“I hadn’t expected it to be so clear, so substantial, and so public,” he said.

The package calls for robust protection against unfair competition, “in particular through a faster and sector-wide application of anti-dumping and anti-subsidy measures at European level”, and says any circumvention of those measures must be effectively prevented.