Ursula von der Leyen warns of ‘second China shock’ to EU

European Commission President Ursula von der Leyen has warned of a ‘second China shock’ impacting Europe, emphasizing the need to rebalance trade relations with the world's second-largest economy. During her annual State of the Union address, she noted that the bilateral goods trade deficit reached approximately 1 billion Euro per day last year, a situation she described as unsustainable.

To address these imbalances, von der Leyen committed to using all available tools to ensure European businesses compete on a level playing field and to reduce strategic dependencies, particularly regarding raw materials from China. This follows a scheduled meeting between EU Trade Commissioner Maros Sefcovic and Chinese Commerce Minister Wang Wen Tao.

Beyond trade with China, von der Leyen’s vision for the European Union focuses on increasing economic, technological, and defense autonomy. She argued that the bloc must strengthen its competitiveness and political independence to navigate a volatile global environment characterized by geopolitical conflicts and technological shifts. However, analysts suggest the EU faces structural challenges, including fragmented energy and capital markets, which may hinder its ability to translate its scale into unified geopolitical strength.