Leaders of the G7 rich nations may have attended this month’s summit in France hoping for solidarity against China. But, surrounded by the Iran-Ukraine conflict and the isolation of US President Donald Trump, the unpopular gathering did not take place.
There was no public consensus on how to handle the known china shock 2.0, issues of perceived overcapacity and misuse of funds which are considered to be the reason for China’s exports to Europe.
Instead of announcing a common plan, as the French locals had previously hoped, the light statements of the meeting called for the cooperation of the Group of Seven to reduce the dependence on the supply of essential minerals from abroad and to support “balanced, sustainable and sustainable growth” against “global imbalances.” China was not mentioned, although it was clearly a target.
The European Union (EU) itself is a non-countable member of the G7. A European consensus seems to have been reached: China is at the root of their economic problems. Evidence? China’s trade surplus it reached US$1.19 trillion last year. In the first five months of 2026, exports to Germany increased by 17.3 percent year-on-year. Meanwhile, according to Chinese customs data, imports from Germany increased by only 1.5 percent.
So the EU cries and makes threats. But if the US fails to reverse the shock of China 1.0 during Trump’s first term, it seems doubtful that a much weakened EU or even the G7 would do much better this time around.
Speaking after the summit meeting of the European Council in Brussels last week, German Chancellor Friedrich Merz said he strongly supports the European Union’s tough stance against China. Not content with accusing China of dumping goods on the European market because of its overcapacity, he now claims the yuan is undervalued by 30 percent. Even the International Monetary Fund estimated it to be undervalued by only 15 to 16 percent.
