France and Germany are calling for the European Union to create a new legal mechanism that would allow Brussels to respond more quickly to trade disputes, including cases of dumping or restrictions on critical supplies.
French President Emmanuel Macron and German Chancellor Friedrich Merz outlined the proposal in a letter to European Commission President Ursula von der Leyen. Although China was not explicitly named, the initiative comes just days before von der Leyen’s planned visit to Beijing, where trade tensions are expected to be discussed.
The two leaders said the European Commission needs a “credible instrument” capable of taking decisive action, including restricting a country’s access to the EU single market when necessary.
Faster Action Without Unanimous Approval
Under the proposed framework, the Commission could respond to trade aggression within days rather than waiting for approval from all 27 EU member states. A weighted majority of member states would, however, be able to block the measures.
A German government source said the mechanism could be used in a situation where a trading partner restricts supplies of strategically important raw materials. In such circumstances, the EU should be able to impose economic consequences comparable to those it faces, the source said.
The source also argued that the United States and China can respond more quickly and forcefully during trade disputes, while the EU’s existing instruments are less effective.
Macron and Merz are expected to present the proposal at an EU leaders’ summit in Brussels next week.
China at the Centre of EU Trade Concerns
The proposed instrument could technically be used against any country. However, the EU’s growing trade imbalance with China is a major concern for policymakers.
The European Union recorded a goods trade deficit with China of approximately €360 billion last year, reflecting the much greater value of Chinese goods entering the bloc compared with European exports to China.
European industries have also raised concerns about competition from Chinese manufacturers, particularly in sectors such as steel used in wind turbines, semiconductors and batteries.
EU Considers Its Own Version of US Trade Powers
The European Commission is already examining additional measures to protect European industries. One option under consideration is an EU equivalent of the United States’ Section 301 trade mechanism.
Washington has used Section 301 to investigate foreign trade practices it considers discriminatory and, where warranted, impose retaliatory tariffs.
The Franco-German proposal would give the EU another potential means of responding quickly when it believes its economic interests are being threatened, while preserving the ability of member states to block proposed action through a weighted majority.
