Germany and France want the European Commission to have new powers to hit back quickly when foreign governments distort markets, with China the obvious target. Chancellor Friedrich Merz and President Emmanuel Macron made the request on Monday in a letter to Commission President Ursula von der Leyen, sent with a policy paper on global economic imbalances.
The main proposal is an instrument that would restrict access to the EU single market, which Berlin and Paris see as the bloc’s strongest card in its dealings with Beijing. Decisions would pass through comitology, the procedure in which representatives of the member states scrutinise Commission measures, and would go ahead unless a qualified majority of countries objected. The paper says the tool should be “country agnostic” and cover distortions from subsidies to currency manipulation. A source at the Élysée said the goal is to be able to impose tariffs as well as other measures, and the response could borrow from the EU’s existing Anti-Coercion Instrument, which allows the bloc to limit access to licences and intellectual property rights.
The pressure behind the proposal is considerable. Brussels describes its economic relationship with China as unsustainable, with the EU’s trade deficit estimated at €1 billion a day in 2025, and it has given Beijing until this month to offer concessions. The Franco-German paper warns of “a massive industrial shock” in sectors central to Europe’s economy, naming pharmaceuticals, aerospace, automotive, industrial machinery and chemicals.
Berlin and Paris also want a diversification instrument, which von der Leyen first announced at the European Council in June, to reduce European dependencies and head off supply chains concentrated in a single country or company. The paper accepts that any retaliation from Beijing would test EU unity, and it asks for an inventory of possible countermeasures, an assessment of how each member state would be affected and closer coordination among national leaders.
On trade defence, the two governments urge the Commission to open more investigations on its own initiative and to move staff and resources to support them. They also propose a broader approach to disputes covering whole sectors, along with targeted changes to anti-dumping, anti-subsidy and safeguard rules to make EU measures harder to get around. The question goes to EU leaders at next week’s European Council summit, where France and Germany plan to push for urgent action.
