Chancellor Merz urges China to allow CNY to float freely as trade surplus with EU nears doubling since 2020.
European officials are pressing China to address the yuan’s alleged 20–30% undervaluation, arguing it distorts trade competitiveness. Chancellor Merz called for dialogue on monetary and FX policy, warning the EU cannot compete against a manipulated currency.
China’s trade surplus with the EU has surged, surpassing its surplus with the US and nearly doubling since 2020. October deadlines loom for Beijing to act, or Europe may adopt US-style tariffs. China’s latest trade data showed imports up 36% year-on-year and exports rising 27%, exceeding expectations.
Analysts note China will reject any Plaza Accord-style intervention, leaving Europe with limited options to balance trade dynamics. The standoff risks escalating trade tensions if no resolution emerges.