Before addressing the global economy, we must first reflect on our domestic situation. What do we observe?

Firstly, Europe possesses strong economic fundamentals. Inflation is returning below the ECBs 2% target, reducing borrowing costs. Public debts and deficits are lower than those in other major economies. The EU produces almost as many STEM graduates per million inhabitants as the United States. Our share in global patent grants is comparable to other leading nations. Furthermore, households save approximately €1.3 trillion annually, providing us with the means to finance growth. We have the potential to significantly reduce energy prices as we transition to secure, low-cost clean energy sources—projected to exceed 40% of our energy consumption by 2030. We are the primary trading partner for over 70 countries and are actively pursuing new agreements.

However, we need profound changes on three fronts.

First, we must simplify the environment for innovative companies to grow. Despite our savings, entrepreneurs struggle to access risk capital due to fragmented capital markets.

Second, we need to enhance the investment climate in Europe. Two-thirds of EU companies indicate that regulation is a major barrier to investment, with lengthy permitting processes, excessive reporting requirements, and inconsistent enforcement of digital regulations hindering progress.

Third, we must lower the cost of doing business in Europe, particularly regarding energy expenses. Achieving this requires substantial investments in infrastructure and smarter market design, alongside expedited permitting and long-term contracts.

We have adopted a new urgency to tackle these challenges, which is a key priority of my mandate. Europe understands the message.

Now, let’s turn to the global economy.

Consider the facts regarding our relationship with our G7 partners: 54% of foreign investment into Europe originates from G7 countries, and 49% of Europe’s outward investment goes to these nations. This creates a solid foundation.

I offer three reflections on why it is in our mutual interest to maintain open trade among G7 countries.

Firstly, tariffs, regardless of who imposes them, ultimately act as a tax borne by consumers and businesses. Higher input costs for companies translate into higher prices for consumers.

Secondly, tariffs introduce uncertainty that disrupts business planning and investment. Many CEOs report that uncertainty is their biggest challenge, complicating innovation and growth.

Thirdly, focusing on tariffs between partners diverts our attention from the real threats we face collectively.

We all agree that the current global trading system is flawed, lacking necessary guardrails. Donald is correct; a significant issue exists. However, we believe that the most pressing challenges do not stem from trade among G7 partners.

Instead, the roots of our collective issues trace back to China’s accession to the WTO in 2001. China continues to identify itself as a developing nation, which is untenable. It has demonstrated a reluctance to adhere to the rules-based international system. While others opened their markets, China focused on undermining intellectual property protections and employing massive subsidies to dominate global manufacturing and supply chains. This is not true market competition; it is deliberate distortion that undermines our manufacturing sectors.

This is the challenge we must address together. The G7 economies represent 45% of global GDP and over 80% of intellectual property revenues. This is leverage that we can wield collectively.

Let us harness this power to build resilient supply chains, strengthen our technological and industrial leadership, and reform global trade rules to reflect current economic realities. This is why I am collaborating closely with Donald to establish a mutually beneficial trade agreement that highlights our economic strengths and supports our businesses, workers, and consumers.

In our next session, I will elaborate on how we can align our strategies to reduce dependencies, enhance resilience, and safeguard our industrial base in a volatile world.

Thank you.