EU trade tools against China urged by France, Germany

French President Emmanuel Macron and German Chancellor Friedrich Merz have urged the European Union to develop a new legal tool to respond faster to potential trade conflicts, with concern focused on China.

In a letter to European Commission President Ursula von der Leyen seen by AFP, Macron and Merz said the commission needed a credible instrument for decisive action, including the ability to cut off access to the European single market “if needed”.

The letter did not explicitly name China, but it was sent days before the EU trade commissioner was due to travel to Beijing for talks on trade frictions.

Germany and France want the commission to be able to respond to trade aggression within days. Under their proposal, action would not need approval from all 27 EU countries, though a weighted majority of states could block it.

A German government source said the tool could be used if a country cut off supplies of critical raw materials, and that in such a case “the EU must be able to inflict damage comparable to that being done to us”.

Macron and Merz are expected to present their ideas at an EU leaders' summit next week in Brussels. The European Commission is already working on new tools to protect EU industries, including a possible European equivalent of the US “Section 301” trade tool.

Brussels says the EU's goods deficit with China, which reached about 360 billion euros last year, is damaging key European sectors. European companies say Chinese rivals are undercutting them on prices in industries including steel for wind turbines, semiconductors and batteries.