EU’s Unsustainable €1bn-a-day trade gap with China

  

The EU’s trade deficit with China has been growing for years and, thanks to the efforts of the prosperity and trade hating left and the save-the-planet-by-destroying-civilisation mob recently reached a record €1bn (£0.8bn) a day, according to EU official trade data. This has fuelledconcerns over the future of Europe’s “industrial backbone”.

The gap between the EU’s imports from China and exports to China amounted to €31.9bn in April, according to the latest import and export data from the EU statistics body Eurostat.

The data comes as European leaders prepare to meet on Thursday to discuss measures to address the growing trade imbalance, which includes the increased presence of Chinese electric cars – exported by a heavily subsidised industry – in Europe and the use of everyday components in factories across the bloc.

On receiving the news Javi López, European Parliament vice-president, said the European Union's trade imbalance with China "cannot continue", with the bloc running a €1bn-a-day trade deficit.

After travelling to China this week seeking to end the eight-year stalemate in negotiations with The Peoples Republic to find a way of resolving this trade imbalance, López (S&D, Spain) called for the EU to "relaunch" its relationship with Beijing. He believes dialogue, rather than defensive tariffs and restrictions, is key to rebuilding ties with the Chinese government

The Spanish MEP says solutions based on "dialogue and cooperation", rather than by triggering a trade war between the EU and China should be found, and he expects the European Commission's efforts to begin easing tensions will soon result in progress.

Senor Lopez is sadly out of touch with reality if he thinks the economically devastating trade imbalance between EU and China can be resolved through diplomatic negotiations. That is just not how the Chinese Communist Party do things. 

The EU’s trade deficit with China is exploding year in year due to Europe - wide (including UK which is no longer and EU member but plays by the same rules,), and the EU’s heads of state and government, having exported whole industries, and the jobs that go with them, to China, India and the global south while simultaneously crippling what industries remain in the west with high taxes and exorbitant fuel costs in pursuit of  virtue signalling policies like 'Net Zero' are beginning to panic. China and other developing economies pay lip service to net zero and other sacred cows but happily go on increasing CO2 emisssions and damaging the environment regardless.  

China’s exports to the EU have risen by 16 per cent in the 2024 - 25 financial year (  Financial Times ) and look set to rise by a similar amount in the current year. The deficit between what we buy from China and what we sell to them now amounts to €1 billion per day. This is not something any European economy can sustain over a prolonged period,  particularly will all major European economies being burdened with debt as a result of overly generous welfare systems. A trade war with China is looking increasingly inevitable.

The leader of the EPP Group in the European Parliament, social democrat Manfred Weber, is uncharacteristically blunt in his assessment.  Weber told the German newspaper Bild

‘Either we defend ourselves, or China will destroy much of our industry.’ 

 Weber is right on target there, China's heavily subsidies automobile manufacturers are already causing Europe's main car makers to reduce production and cut jobs, as our recent report on Vlokswagen demonstrated.

 The European market is now being flooded with cheap Chinese goods after China’s trade war with Trump and the United States put a stop to much of its exports there. A thorn in the EU’s side is China’s extensive state support for various industries. This gives Chinese companies an unfair advantage as EU and World Trade Organisation approaches to subsidies are governed by the Agreement on Subsidies and Countervailing Measures (SCM Agreement), which restricts the use of subsidies and allows member countries to impose countervailing measures if they can demonstrate injury to a domestic industry from subsidised imports.

The EU is accustomed to treading softly in relation to China, and President Antonio Costa did not even mention China in responding to Lopez in the trade deficit issue.

Beijing is aware of European dissatisfaction with the situation and has launched a campaign to prevent the EU from adopting new measures to slow Chinese imports. Earlier this month China cancelled two important diplomatic meetings with the EU at short notice, according to the FT.

Beijing is said to be particularly dissatisfied with the EU’s new industrial legislation and the ‘Buy European’ decision. EU diplomats, for their part, are clear that ‘macroeconomic imbalances’ is synonymous with China.

‘Of course it is China we are talking about,’ say two senior diplomats.

They believe that the EU must sharpen its trade policy instruments to meet what they regard as unfair competition from China, but reject the suggestion that this amounts to provoking conflict.

‘This is a reaction. It was they who started it,’ says one of the diplomats.

If the EU prioritises internal compromise, it will end up suffering defeat at the hands of China, which is paying close attention and knows where to apply pressure.

FROM THE ARCHIVE:

 

 

 

 

 

Volkswagen Crisis - German Car Giant To Drastically Reduce Model Range As Germany's Industrial Decline Continues

 https://www.telegraph.co.uk/business/2026/07/10/volkswagen-halves-model-range/

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Credit: Jens SCHLÃ TER / AFP Getty Images via Daily Telegraph

Volkswagen (VW), not long ago the word's biggest automobile maker, but now second to Toyota, in danger of being overhauled by Hyundai and with the spectre of China's Geeley and BYD looming ever larger in the rear view mirror, having failed to agree with unions  a plan to cut 100,000 jobs, are now looking for ways to axe half of its two model range as part of a cost-cutting drive.

The German car giant, which has been battling a downturn in sales performance exacerbated by high energy and labour costs, supply line problems and punitive taxes imposed by the German government and the EU,, announced the measure after the board's last ditch effort failed to agree on job cuts of up to 100,000 roles in a crunch meeting with union representatives.

VW said that halving the number of models it sold would allow it to focus on its best-selling and most profitable vehicles.

It did not say which brands would be affected or when the changes would be made, but the move raises the prospect of dozens of popular models being scrapped.

 Volkswagen and other EU car manufacturers are being hammered by competition from China where there are no net zero obstacles and exports are heavily subsidised. The EU's protectionist policy is supposed to cushion intra-EU car manufacture from this only it can't due to the risks of a trade war. So what is the point of the EU?

 Some may claim this Volkswagen crisis is capitalism in action, and while that may be true to some extent in Germany, we must always be aware that the western European nations (and a lesser extent in the USA,) due to state and EU interventions and policies like the enforced switch to EVs, net zero and high taxation to support extravagant welfare systems, market forces are distorted. The price of new cars have become prohibitively expensive mainly due to (in the UK anyway) the anti car Government piling more and more taxes on top plus the ludicrously expensive road fund tax (which doesn't go on roads) on new cars.I think it is only buyers of Company cars and the outrageous disability car purchase scam who can afford to buy a new car.

I can afford to buy a new car, but why would I when it loses 30% of its value once I take delivery? I’d rather pay 30% less. Most people don’t buy cars anyway, they pay a monthly fee to use them, like mobile phones, music, Sky, Netflix and the like

Short of new sactions across the board on Chinese cars, VW are going to have to eliminate most of their 'cheaper' cars, and hope that the expensive ones maintain some market share. I guess this is essentially what this new plan is.

Thank you Net Zero. The European car industry is finished, In 5 years time the Chinese will own VW, Stellantis, BMW, Renault and ... I can't think of any other European owned company except Mercedes but they will survive by retreating to the luxury market.

 FROM THE ARCHIVE: 

 

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Futures - Some Speculations On How The Forever Wars May Change The World

contributed by Hugh Jarse, 4 June 2026 

 

It seems peace talks between the USA and Iran have now stalled completely thanks to the intervention of the Israelis although whether there were ever realistic hope for a lasting peace and full reopening of the Strait of Hormuz seaway will probably never be known.

What this means to the west and the democratic nations of south east Asia and the Pacific area is that we are in for prolonged high prices for fuel, disruption of supply lines and soaring cost of living as Russia and China take advantage of the situation to turn the screws and squeeze western economies.

Another possibility is Iran will fall. Unfortunate but the possibility exits. Instead of shutting out the possibility Russia should  plan (and probably has,)to turn it into a grand opportunity. If Iran is weakened it will be likely  to host Russian military bases in the country to counter the threat from Israel. Russia has been asking this but thus far Iran has refused. Very bad memories of WW2 events when Russia joined the evil empires. Having a military presence in the Strait of Hormuz is a game changer for Russia. Unlike Iran, Russia can’t be negotiated away from assuming a hostile position. 

This would create a massive bargaining chip to force surrender of Lewinsky Zelensky regime (pun so intended), lift petroleum sanctions against Russia (or Arab oil goes nowhere), a warm water port in Chabahar for nuclear submarines that more than compensate for the loss of Black Sea and Baltic Sea exits. Azerbaijan stands in the way of total Russian domination of the region. 

This Turkish outpost is a threat to the region. It’s easy game. Thereafter Oman too can be cleared paving the way for Iran to control the entire Arabic coastline other than inlets. Djibouti and surrounds are already pro-Iranian thanks to the Al-Shabab and Houthi alliance. The decision makers in the north see this once in a century opportunity. But all depends on a weakened Iran. It’s still strong. Let the fools do all the hard work of weakening Iran before Russia moves, that's how the Russians have always worked.    

It’s not well known that Russia is one of the leading exporters of foodstuffs, grains especially. Its farmers believe Russia has the ability to solve what they call the food problem, meaning global hunger. Within Russia and the Central Asian EAEU members, there’s a vast amount of land that can be cultivated or made into pasture, plus the advances  in greenhouse farming is remarkable allowing crops to be grown in what are very marginal climates. While governments in the UK and Europe obsess over crackpot policies like Net Zero, 'rewilding and importing all food and manufactured goods (paid for with money borrowed from China via the global banks,) the nations our leaders tell us are 'The Bad Guys' have positioned themselves to take advantage of the sentimental stupidities that pass for economic policy in the developed nations.

We should also look at the advances African nations have made toward attaining food sovereignty with help from Russia and China. The nations most affected by the fertiliser shortage caused first by the sanctions imposed on Russia for its action against the Ukronazis in Kiev and now exacerbated by the much reduced flow of goods out of The Persian Gulf, are those with industrial agriculture methods including the use of GM seeds whose high yields depend on those inputs. 

This kind of response from Russia and China is understandable, the US and Europe have been working to impoverish Russia since before 1945, and has colonised and exploited Africa since way before then, and has been no friend to China until it suited the elites and the global banks to use China as the world's workshop because of its low labour costs and a totalitarian systrem of government unencumbered by the lobbying of 'save-the-planet' screechers.
 

As things stand it looks increasingly possible the USA and Europe will lose the current set of wars that we are undertaking. Prolonged war would leave European Russia severely damaged.  Asian Russia and Central Asia are likely to survive mostly intact and have a convenient long border with China.  The US and Europe will continue to promote war and submission in Africa, but that is coming to an end due to growing Chinese influence on the dark continent. None of the west's leaders appear to possess the testicular fortitude to risk pissing off the Chinese as they have the Russians   

After the west's capitulation, Asian Russia would probably become very prosperous.  Prosperous enough to rebuild European Russia, and then help with other regions after that.  Africa will steadily grow and become an independent continent.  If they become mostly internally peaceful with respect to each other, Africa will prosper.
 
The US has the ability to destroy lots of the world before it loses, and the odds of the US unleashing nukes is not zero.  However, if the Democrats retake the White House at the end of the Trump presidency and revert to the loonytoons policies of the Obama and Biden eras, the ability of the US to control other nations will become close to non-existent.  Even if the Epstein class relocates to Argentina, their wealth and power will be substantially reduced.  Thus we can be reasonably optimistic about the long term future of humanity on the planet Earth.  It’s just the short term we should be concerned about.

Another possibility is Iran will fall. Unfortunate but the possibility exits. Instead of shutting out to the possibility Russia should plan to turn it into a grand opportunity. If Iran is weakened Iran will likely host Russian military bases in the country. Russia has been asking this but thus far Iran has refused. Very bad memories of WW2 events when Russia joined the evil empires. 

Having a military presence in the Strait of Hormuz would be a game changer for Russia. Unlike Iran, Russia can’t be negotiated away from assuming a hostile position. A massive bargaining chip to force surrender of Lewinsky Zelensky regime (pun so intended), lift petroleum sanctions against Russia (or Arab oil goes nowhere), a warm water port in Chabahar for nuclear submarines that more than compensate for the loss of Black Sea and Baltic Sea exits. 

Azerbaijan stands in the way of total Russian domination of the region. This Turkish outpost is a threat to the region. It’s easy game. Thereafter Oman too can be cleared paving the way for Iran to control the entire Arabic coastline other than inlets. Djibouti and surrounds are already pro-Iranian thanks to the Al-Shabab and Houthi alliance. Hope the decision makers in the north see this once in a century opportunity. 

But all this depends on a weakened Iran. It’s still strong. Let the fools do all the hard work of weakening Iran before Russia moves the knight. Oh a byproduct will be the collapse of the entity hanging north of the Red Sea.  

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Iran Weaponises The Strait of Hormuz Against The Petrodollar

 
The Petrodollar system has propped up the US economy for 50 years - picture: sbcgold.com

In spite of the very fragile ceasefire in the conflict between the USA / Israel alliance and Iran, the theocratic regime of the Muslim nation has opened a new front in the war by weaponising the Strait of Hormuz against The Petrodollar. 

Having made this strait a de facto toll gate at the entrance to the Persian Gulf, the Iranians are demanding that commercial vessels pay hefty transit fees in yuan or Bitcoin, according to multiple reports form news organisations in the middle east. As well as signalling a further deepening of Chinese-Iranian economic cooperation it brings a new dimension to Ian's asymmetric warfare. A huge proportion of the world's hydrocarbons supply passes through the Strait of Hormuz and significant reductions in shipping movements will trigger a global crisis.

China, Russia and Iran along with their BRICS partners have been threatening currency wars with the aim of replacing or at least offering a serious rival to the US Dollar as the primary global reserve curency. 

For years, Russia and the two Asian allies have accused Washington of using the dollar's dominance in global trade as a weapon, imposing sanctions and inflicting economic pain on rivals through the dollar-dominated financial system.

Now the ongoing war aound The Gulf - and lets not fool ouselves that the current ceasefire will turn into lasting peace - is forcing a fundamental reassessment of the petrodollar system that has underpinned US financial hegemony for decades. This informal arrangement, in which Gulf oil producers price crude in dollars and reinvest revenues in US assets, emerged as a cornerstone of American economic power in the 1970s and has held since then. But with the US-Israeli campaign against Iran now in its second month, the strait’s uncertain fate is raising urgent questions about whether that order can survive. 

Iran has so far managed to withstand the US-Israeli attack and inflict some damage on Israel and US allies around The Gulf, even after significant casualties aming its leadership, and has been able to assert strategic control over the Strait of Hormuz. Thus they have added a currency war to the shooting war.

This means Iran has been able to insist it will only accept  payment for passage through the Strait of Hormuz in Chinese Yuan or crypto currencies, . At least two vessels have so far settled the transit fees in Yuan via a Chinese maritime services company which is acting as an intermediary and handling payment to the Iranian authorities.

This is a significant even though analysts debate if it can ultimately become decisive in the longer run. The de-dollarisation rhetoric has emanated from China, Russia, Iran and their BRICS partners for years, without materialising into meaningful change. Now, if one of the vital choke points through which one-fifth of the world's petroleum passes becomes conditional on currency denomination that is meaningful. 

The practical consequence, even if it was partially adopted, would be a bifurcated global oil market. One where yuan-denominated barrels flowing through Hormuz for payment in China's currency in the Chinese payment system CIPS ( Cross-Border Interbank Payment System) and dollar-denominated barrels are rerouted at a high additional cost and time for those who are not using Chinese currency. 

Further, Iran is employing a broader mechanism employing informal transactions in cryptocurrency to effectively circumvent the US financial system. Wang Yiwei, director of the Institute of International Affairs at Renmin University, said that the yuan-for-passage is more likely to gain international acceptance than a complete blockade. 

Of far more concern to banks and businesses in the west if oil shipments through the strait are to be transacted in currencies other than the dollar, particularly the Chinese yuan and the Iranian rial the  Gulf states, driven by security concerns, begin to distance themselves from the dollar-based energy trade, the ripple effects could be profound: reduced demand for the greenback, waning appetite for US Treasury debt, and a gradual erosion of the dollar’s reserve currency status. 

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If the conflict in Syria, currently showing signs of spreading to Turkey, Iraq and Kurdistan were to escalate into a regional war, a proxy for east and west to butt heads without sustaining too much domestic damage, is Egypt likely to take advantage of the distraction and

EXPLORE:
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Does Trump's Crazy Rhetoric Suggest He Plans To Nuke Iran?

 

Nuclear explosion (Picture - adobe stock image )

American President Donald Trump inexplicably gambled the future of the world and his own political legacy on achieving regime change in Iran. From last summer's first shouts in the campaign to replace the theocratic regime this blog warned that Iran was not some third world failed state which could easily be rolled over. 

Now Trump's Iran gamble, which was always a risky bet, is poised on a knife edge, the Iranian's have so far given as good as they get in terms of air and drone strikes, have invoked asymmetric warfare by weaponising the Strait of Hormuz through which, when shipping can move freely through it, approximately a quarter of the worlds oil, natural gas and petroleum products are distributed.. 

At first, in the opening days of the current round of hostilities most conservative opinion in the USA was behind Trump but currently, five weeks into the war, it is getting harder to find commentators who are backing him to the hilt. Even some of his more usually supportive backers are getting cold feet. Andrew Day in American Conservative is worried that Trump might use nukes in Iran:

A new rhetorical theme emerged last week, when Trump threatened to bomb Iran “back to the Stone Ages”. The phrase is associated with Curtis LeMay, who served as Air Force chief of staff during the Vietnam war. LeMay is known for something else too: his promotion of nuclear weapons and complaint that Americans had a “phobia” of using them.

Trump doesn’t seem to share that deranged perspective, but nuclear anxieties are growing thanks to his belligerence. Two weeks ago, a United Nations representative resigned from his post and leaked the disturbing information that “the UN is preparing for possible nuclear weapon use in Iran”. Days earlier, officials from the World Health Organisation told Politico they were worried about a possible nuclear attack.

If Trump decides to go further and actually push the big red button, at least one of his main advisors likely wouldn’t object. Secretary of War Pete Hegseth has echoed Trump’s threat to send Iran back to the Stone Age, and he says US armed forces should aim for “maximum lethality, not tepid legality”. 

As Trump's threats and claims have become crazier day by day it looks as if nuclear is on the agenda. Many American commentators think there is a strong likelihood the US will use a nuclear weapon. Who is going to object? America's NATO allies in the UK and Europe have surrendered the right to do that because of the way they hve distanced themselves from the whole escapade. Russia and China are Iran's allies but it is unlikely they would risk all out war with The USA over Iran. Both would probably instigate moves to have America censured by theUnited Nations and then take a PR advantage of the situation since their leadership is not crazy like ours is (in the US). 

There is no certainty that the Iranians, like the Japanese will surrender should the US use a weapon of mass destruction, more likely they would retreat and allow a US occupation and then wage guerilla warfare for years, knowing that the American public do not like US soldiers returning home in body bags. 

Will there be someone in the US government able to stop such a thing? We shall see. This is an existential struggle for Iran but also for the American global hegemony. If the US allows Iran to win that would be the beginning of the end of the Petrodollar Empire as many are predicting.

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If the conflict in Syria, currently showing signs of spreading to Turkey, Iraq and Kurdistan were to escalate into a regional war, a proxy for east and west to butt heads without sustaining too much domestic damage, is Egypt likely to take advantage of the distraction and

EXPLORE:
[Daily Stirrer] ... [ Our Page on on Substack ]... [Boggart Aboad] ... [ Ian Thorpe at Quora ] ... [ Greenteeth Home ] ... [ Greenteeth on Minds.com ] ... [ Here Come The Russians ] ... [ Latest Posts ] ... [ Blog Bulletin ]