With Washington raising barriers, China's push to shift trade toward Europe is running into one big demand: let the yuan rise against the euro and level the playing field. German Chancellor Friedrich Merz landed in Beijing this week to meet Chinese President Xi Jinping, the most prominent European Union leader to visit since last month's rancorous standoff with U.S. President Donald Trump's administration over Greenland. Get a look at the day ahead in U.S. and global markets with the Morning Bid U.S. newsletter. Sign up here. Advertisement · Scroll to continue
Other EU leaders have traveled to China this year, including Finland's Petteri Orpo and Ireland's Simon Harris. French President Emmanuel Macron visited as recently as December. Europe has once again frozen a trade deal with Trump because of confusion over U.S. tariff policy and wider concerns about bilateral relations. The political optics of a re-embrace of China are not lost on anyone. But there are brass tacks at stake here. Line chart showing China trade surplus as percentage of GDP for EU and US over time China is Germany's largest single trade partner, and trade ties between the two regions have grown since the COVID-19 pandemic, even as direct U.S.-China trade continues to plunge. What's more, China's overall trade surplus ballooned to an annual record of $1.2 trillion in 2025.
