Europes Trade Tensions With China Are Coming to a Head

The European Union and China are heading toward a trade showdown.Europe’s trade negotiators are meeting with Chinese officials on Thursday and Friday in Beijing.A week later, Europe’s presidents and prime ministers will gather in Brussels to discuss industrial competitiveness with China, among other agenda items.

Their concern is urgent.The region’s trade deficit with China is running at 1 billion euros ($1.1 billion) per day.European officials blame an undervalued Chinese currency and Beijing’s state-controlled banking system, which has supplied vast amounts of cheap credit to build export-focused factories.

Chinese officials offer a different explanation.They say much of the widening imbalance reflects Europe’s surging imports of electric cars, solar panels, batteries and battery chemicals.

European demand for those products has risen as the continent tries to combat climate change, adjusts to the loss of inexpensive Russian oil and natural gas and copes with the war in the Middle East — developments for which China argues it should not be blamed.Europe is not alone in its concerns.China’s export push has unnerved other trading partners, including the United States, as Beijing’s trade surplus reached a record $1.19 trillion last year.

Ursula von der Leyen, the president of the European Commission, warned in an address last month that Europe’s trade deficit with China had reached a “tipping point,” leading to “deindustrialization in the industrial heartlands of Europe.”...