German industry calls for stricter China policy

The Federation of German Industries (BDI) has urged the government and the European Union to pursue de-risking from China more consistently, while warning against a general turn to protectionism.

In a 42-page paper agreed by its 38 member associations after six months of talks, the lobby said on September 25 that “systemic competition with China’s economy is increasingly challenging the open social market economy and requires an appropriate industrial and trade policy response”.

The document, Principles of Economic and Trade Policy ( Grundsätze der Wirtschafts- und Handelspolitik ), is meant as a multi-year guideline for about 100,000 firms.

“Germany as a location is under massive pressure,” it states.

De-risking, the BDI said, remains the right approach but “must be implemented far more stringently”.

Exchange with China still matters, according to the paper. It should be aligned more clearly with strategic interests.

The BDI accepted that de-risking could carry costs, including retaliation from Beijing. “Passivity would be far more costly economically in the long term and irresponsible in terms of security policy,” the paper said.

Chief executive Tanja Gönner said the EU needed tools that can act quickly against unfair competition, including anti-dumping and anti-subsidy measures, and that any new defence instruments must be carefully calibrated.

The paper also asks Berlin and Brussels to widen partnerships with other regions on economic and security grounds, and to take a more assertive line with the United States.

“Where protectionist measures by the U.S. impair the competitiveness of European companies, appropriate European countermeasures should be considered, without undermining the long-term strategic relationship,” Gönner said.

Gönner told journalists that diversifying supply chains takes time and that raw-material partnerships were one route.

The BDI is committed to restructuring the economy for climate protection but is calling for short-term aid.

It called for a return to spending discipline in the public sector and adherence to the debt brake in the Basic Law.

It also urged Berlin to declare growth and competitiveness its top priority.

China remains both a vast car market and a dominant supplier of intermediate goods and critical minerals. In 2025 it regained its place as Germany’s biggest trading partner, with trade worth €251.8 billion, according to the Federal Statistical Office (Destatis).

Germany’s goods deficit with China widened in 2025 to €89.3 billion, from €66.9 billion the year before. German exports to China fell 9.7 per cent to €81.3 billion while imports rose 8.8 per cent to €170.6 billion.

Autoworkers’ and machine-builders’ associations had already shifted towards tighter trade defence before the BDI text. On July 15, the Mechanical Engineering Industry Association (VDMA) called for greater protection against unfair Chinese competition.

Chancellor Friedrich Merz has asked his cabinet for proposals on EU–China imbalances, with a decision on Germany’s negotiating position at EU level expected in October.

The BDI stopped short of listing specific tariffs or bans.

Europe’s biggest carmaker, Volkswagen Group, has presented dismal 2025 annual results.

Today, the company – which includes brands such as VW, Audi, Porsche, Seat and Skoda – announced it will cut 50,000 jobs in Germany until 2030 to regain efficiency. https://t.co/GaRExTKcqV

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