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EU-China trade war risk rises as probe targets EU nitrotoluenes

Commerzbank said a Franco-German push for tougher EU measures ahead of Trade Commissioner Sefcovic’s October deadline raises the risk of currency implications if talks fail.

Reported · Written up by our desk · Major Pairs

FXStreet, citing a Commerzbank newsletter by Volkmar Baur, said China’s new anti-dumping probe into EU nitrotoluenes is likely tied to broader trade frictions between Beijing and Brussels.

The outlet said a Franco-German non-paper urges tougher EU action on dumping, subsidies and currency manipulation ahead of Trade Commissioner Sefcovic’s trip to China, with both sides previously agreeing to seek a solution by October for an EU-China trade imbalance.

Commerzbank warned that if negotiations do not move beyond rhetoric and deliver concrete measures, the risk of an EU-China trade war could carry significant currency implications.

FXStreet also noted Commerzbank said China is a key supplier to Germany and the European Union for intermediate goods, while Europe remains an important export market for China, adding to the potential cross-currency impact.

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