Merz demands EU action on unfair trade practices ahead of summit

German Chancellor Friedrich Merz on Wednesday called for stronger European action against unfair trade practices ahead of the upcoming EU summit.

In a statement to the Bundestag, Germany's lower house of parliament, Merz said: "We will no longer stand by and do nothing when other states harm our economy through heavy subsidies, artificially devalued currencies, overcapacities and aggressive pricing."

The remarks appeared to be directed primarily at China, even though Merz did not name Beijing explicitly. 

The Chinese government has been accused of distorting the market through state subsidies, generating overcapacities and thereby enabling dumping prices that European companies cannot match.

"Whoever seeks a trade conflict with us will find that we now defend ourselves - with proportionate responses," stated Merz. 

Citing proposals he previously outlined alongside French President Emmanuel Macron, the chancellor spoke of a new trade defence instrument that would allow a rapid response to targeted attacks on industries and supply chains. 

The matter should be debated at the EU summit starting Thursday, he said, with decisions following as quickly as possible.

On the EU budget, Merz reaffirmed that negotiations for the years 2028 to 2034 should be concluded this year.

The current proposal must, however, be scaled back across all areas, he argued. 

Merz has called for cuts of several hundred billion euros to the European Commission's budget proposal and has forged an alliance with Austria, Sweden, Denmark, Finland and the Netherlands.

Priorities must be set more clearly, Merz said, with investment needed above all in security and competitiveness. 

"We have no time to lose," he said, highlighting measures including an EU "bureaucracy brake" and a deepening of the single market.