Von der Leyen faces a delicate diplomatic high-wire act on China

The European Union’s push for industrial competitiveness remains largely aspirational. Two years after Mario Draghi and Enrico Letta highlighted critical innovation gaps, the European Policy Innovation Council reports that a mere 15.7 percent of their 383 recommendations reached implementation by July. While EU economy commissioner Valdis Dombrovskis points to the proposed €2 trillion budget for 2028-2034 as a corrective, industry leaders remain skeptical.

Denmark’s former presidency minister, Martin Lidegaard, captured the prevailing sentiment, noting that the bloc is performing better but falling short of necessity. This friction is most visible in the steel sector, where manufacturers face intense pressure from lower-cost imports. Despite the Commission’s decision to cut tariff-free steel import quotas by 47 percent to counter Beijing’s industrial oversupply, the domestic industry continues to shrink.

Observers expect von der Leyen to exercise caution regarding China during her speech. Andrew Small of the European Council for Foreign Relations suggests that while von der Leyen once acted as the primary pace-setter for EU-China policy, she must now navigate a more cautious consensus among member states. This comes as Beijing pushes for dialogue; Foreign Minister Wang Yi recently urged his French counterpart, Jean-Noel Barrot, to avoid further trade defense measures in favor of constructive diplomacy.