WASHINGTON (Reuters) -Europe, in its trade dealings with China, needs to act “in a more offensive way” to protect its own interests and those of its companies, Bundesbank President Joachim Nagel said on Saturday.
The United States’ tariffs this year have caused global turmoil as China has retaliated and rerouted some of the products it can no longer export to the U.S. to other markets.
“When it comes to China, let me only say one thing: China needs Europe more than Europe needs China,” Nagel, who sits on the ECB’s Governing Council, said in Washington.
“We are a strong economy. We are four hundred fifty million people… So we should play the European card in a more offensive way.”
Nagel said Europe needed to avoid a trade war with China and should maintain a dialogue but also needed to protect its own markets.
“The point that I would like to say here is that Europe should play the cards in a way that we are more convinced about ourselves, because the most important market for the European is Europe itself,” Nagel told a financial event.
As U.S. tariffs lead China to reroute industrial and intermediate goods to other markets where they are offered at prices local companies cannot match, economists say, major European companies are also being hit by Beijing’s restrictions on materials such as rare earths whose production it dominates.
In China, European companies are also struggling to compete with domestic brands.
(Reporting by Balazs Koranyi; Editing by Jan Harvey and Barbara Lewis)
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