Germany’s Friedrich Merz and France’s Emmanuel Macron jointly pressed China to appreciate the yuan at a press conference near Cologne on July 17, 2026, as the EU’s trade deficit with China reached approximately 360 billion euros in 2025, equivalent to roughly 1 billion euros leaving Europe every single day. Merz argued the yuan is undervalued by 25 to 30 percent, a figure that gives concrete substance to longstanding complaints from European manufacturers. Germany’s bilateral deficit with China has grown nearly fourfold since 2020, and all 27 EU member states now run deficits with Beijing, making it harder to divide European capitals as China historically has done. A roadmap is due in September 2026, potentially including tariff escalation or anti-subsidy investigations, though critics warn that yuan appreciation alone will not rebalance trade without addressing China’s structural demand imbalances, echoing concerns about the 1985 Plaza Accord’s aftermath.
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