BRUSSELS — France and Germany said Friday they had struck a deal to favor European-made cars under a landmark EU industry bill in exchange for weakening a 2035 vehicle emissions target, ending months of wrangling between the bloc’s two biggest economies.

Under the agreement, Germany would accept stricter “Made in Europe” — or local content — requirements for the automotive industry in the proposed Industrial Accelerator Act, a longstanding French demand, while France would back Berlin’s push to relax the EU’s plan to phase out new combustion-engine cars.

The EU’s current target is for companies to reduce emissions from new vehicles by 100% from 2021 levels by 2035, with the possibility to “earn” 10% of emissions leeway through initiatives like offsets and investments.

France and Germany now want to soften the 2035 target to 90% but without having  to offer investments in alternative fuels to compensate the remaining 10%, as proposed by the European Commission.

“This balanced approach will enable the European Union to pursue its climate objectives while strengthening the technological sovereignty, industrial base and international competitiveness of its automotive industry,” the two countries said in a joint statement.

The agreement, first reported by POLITICO in July, was due to have been announced Thursday, during a meeting of EU leaders in Brussels. But it was held up at the last minute by disagreements within Germany’s governing coalition.

“We hope that this Franco-German dynamic can swiftly lead to an agreement with our partners, for our jobs and our industry,” French President Emmanuel Macron said in a post on social media.

An Elysée official on Friday made clear that, under the Franco-German deal, the scope of Made in Europe for automotive can be extended to the U.K. and Switzerland under certain conditions. — addressing a key concern of Prime Minister Andy Burnham’s government ahead of a Nov. 20 U.K.-EU summit in Brussels.

The agreement was reached after the German Social Democratic Party, the junior partner in Chancellor Friedrich Merz’s coalition government, dropped its opposition.

“This is a modern realignment of German industrial policy that places significantly greater emphasis on preserving jobs and production sites,” said German Environment Minister Carsten Schneider, who is from the SPD.

“The clear expectation for German companies is that they will use these new opportunities to make investments and guarantee jobs here in Germany,” he added.

CORRECTION: This article was updated on Oct. 16 after an earlier version misrepresented the figures in the Franco-German proposal on the softening of 2035 targets.

BERLIN – Bundeskanzler Friedrich Merz und der französische Präsident Emmanuel Macron haben sich auf ein gemeinsames Vorgehen zum Auflockern des Verbrenner-Aus und zu „Made in Europe“ für Autos geeinigt, teilten beide Regierungen in einer gemeinsamen Erklärung mit.

„Unser Kurs bleibt unverändert: Wir streben eine deutliche Senkung der CO2-Emissionen an und stärken zugleich Europas Kapazitäten für die Entwicklung und Fertigung der nächsten Generation von Elektrofahrzeugen“, heißt es in der Erklärung.

Die beiden Regierungen wollen „mit ihren europäischen Partnern zügig auf eine Einigung hinarbeiten“. Das Paket verbinde „einen ehrgeizigen europäischen Dekarbonisierungspfad mit der nötigen regulatorischen Flexibilität, um unterschiedlichen Marktgegebenheiten und Technologieoffenheit Rechnung zu tragen“. 

Damit haben sich Berlin und Paris auf das gemeinsame Papier (hier) verständigt, über das POLITICO bereits berichtet hat.

Umweltminister Carsten Schneider hatte die Einigung jedoch zunächst mit einem Brief an Kanzler Friedrich Merz am Mittwoch aufgehalten. Darin verlangte der SPD-Minister mehr Konditionierung für grünen Stahl, erzählten mehrere Beteiligte POLITICO. Am Freitagmorgen gab es Gespräche der SPD-Minister über das weitere Vorgehen. Im Anschluss daran gab Schneider seinen Widerstand schließlich auf. Aus Kreisen des Umweltministeriums hieß es, die Beschaffung von grünem und recyceltem Stahl könne man auch national regeln.

„Mir war wichtig, dass wir bei dieser Gelegenheit auch klima- und industriepolitische Fortschritte für die Stahlindustrie erreichen“, sagte Schneider in einer Mitteilung. „Es soll Anreize geben, damit Autos künftig mit klimafreundlichem grünem Stahl gebaut werden.“

Laut dem Abkommen würde Deutschland strengere „Made in Europe“-Kriterien für den Automobilsektor im „Industrial Accelerator Act“ akzeptieren, auf die Frankreich gedrängt hat, im Gegenzug wird das Verbrennerverbot weiter aufgeweicht, eine der langen Forderungen Berlins.

„Wir wollen nicht, dass in Deutschland nur noch Komponenten aus Asien zusammengeschraubt werden, sondern dass entscheidende Komponenten hier entwickelt und hier produziert werden“, sagte Vizekanzler und Finanzminister Lars Klingbeil in einer Mitteilung. „Dazu gehört auch die Batteriezellfertigung und alles, was wir für deutsche E-Autos brauchen. Er verspricht der Autoindustrie „mehr ‚made in Germany’ und ‚made in Europe’“. Nun seien die Automobilhersteller in der Verantwortung, „in die Zukunft der deutschen Standorte zu investieren und Arbeitsplätze zu sichern“, so Klingbeil.

Derzeit sieht das Ziel der EU vor, dass Unternehmen die Emissionen von Verbrennungsmotoren bis 2035 um 100 Prozent gegenüber dem Niveau von 2021 senken, wobei sie die Möglichkeit haben, sich durch Initiativen wie Ausgleichsmaßnahmen und Investitionen einen Spielraum von 10 Prozent bei den Emissionen zu „erwerben“.

Im Rahmen des vorgeschlagenen Abkommens wollen Frankreich und Deutschland das Ziel für 2035 nun ohne Nebenbedingungen auf 90 Prozent absenken.

Jordyn Dahl und Georgio Leali haben zu diesem Artikel beigetragen.

Dieser Artikel wurde am 16. Oktober aktualisiert, weil in einer vorherigen Version im letzten Absatz die Zahlen zum Vorschlag der Senkung der CO2-Ziele falsch interpretiert worden waren.

BRÜSSEL — Frankreich und Deutschland konnten sich am Donnerstag nicht auf einen gemeinsamen Standpunkt zum Geltungsbereich der künftigen „Made in Europe“-Vorschriften der Union sowie zu größerer Flexibilität bei der Reduzierung der CO2-Emissionen und zum Verbot von Verbrennungsmotoren ab 2035 einigen.

Der Entwurf des Gegenseitigkeitsabkommens, über den POLITICO erstmals im Juli berichtet hatte, stellt eine bedeutende Annäherung zwischen den beiden Ländern dar und sollte eigentlich in Kürze unterzeichnet werden. Am Donnerstagabend geriet das Abkommen jedoch ins Stocken, da der Koalitionspartner SPD Einwände erhob. Befürchtet wurde, dass wichtige Umweltziele gestrichen worden seien.

„Eine endgültige Einigung steht noch aus“, erklärte ein Sprecher der deutschen Bundesregierung.

Anfang dieser Woche hatte der französische Präsident Emmanuel Macron angedeutet, dass nun Deutschland am Zug sei. „Auf der anderen Seite des Rheins gibt es politische Zwänge, und ich respektiere die Koalitionsgespräche voll und ganz“, sagte Macron am Montag am Rande des Pariser Autosalons.

Gemäß den Bedingungen des vorgeschlagenen Abkommens würde Deutschland strengere „Made in Europe“-Kriterien für den Automobilsektor im „Industrial Accelerator Act“ akzeptieren, auf die Frankreich gedrängt hat, im Gegenzug für eine Abschwächung des Verbots von Verbrennungsmotoren, einer der langfristigen Forderungen Berlins.

„Angesichts der erheblichen technologischen, wirtschaftlichen und geopolitischen Veränderungen seit der Einführung des bestehenden Rechtsrahmens sollte das Automobilpaket ein besseres Gleichgewicht zwischen Klimazielen, industrieller Wettbewerbsfähigkeit, technologischer Entwicklung und der Stärkung der europäischen Wertschöpfung herstellen“, schrieben die beiden Länder in einem POLITICO vorliegenden Vertragsentwurf.

„Auf der Grundlage der deutsch-französischen Ministerräte in den Jahren 2025 und 2026 schlagen Deutschland und Frankreich daher ein ausgewogenes Verhandlungspaket vor, das ehrgeizige CO2-Reduktionsziele mit zusätzlicher Flexibilität und gezielten Anreizen für die europäische Wertschöpfung verbindet“, heißt es in der Vereinbarung weiter.

Derzeit sieht das Ziel der EU vor, dass Unternehmen die Emissionen von Verbrennungsmotoren bis 2035 um 100 Prozent gegenüber dem Niveau von 2021 senken, wobei sie die Möglichkeit haben, sich durch Initiativen wie Ausgleichsmaßnahmen und Investitionen einen Spielraum von 10 Prozent bei den Emissionen zu „erwerben“.

Im Rahmen des vorgeschlagenen Abkommens wollen Frankreich und Deutschland das Ziel für 2035 auf 90 Prozent absenken und im Gegenzug für Investitionen in alternative Kraftstoffe einen zusätzlichen Spielraum von 10 Prozent einräumen (was insgesamt 80 Prozent ergibt).

Entscheidend für die Stahlhersteller und die linke SPD in Deutschland wäre, dass das deutsch-französische Abkommen die Investitionspflicht für „grünen Stahl“ abschaffen und damit einen wichtigen Anreiz beseitigen würde.

„Das zerstört den Leitmarkt für die Stahlindustrie“, erklärte ein Lobbyist der Branche gegenüber POLITICO unter der Bedingung der Anonymität, um über dieses heikle Thema sprechen zu können. Da der Vertragsentwurf keinen Druck auf die Automobilhersteller ausübe, „grünen Stahl“ zu beziehen, werde dieser dadurch zu einem „nice-to-have“-Extra, erklärte die Person.

Als Zugeständnis an Berlin wird im Vertragsentwurf betont, dass der sogenannte „Utility-Faktor“ – mit dem die Emissionen von Plug-in-Hybridfahrzeugen anhand des Verhältnisses zwischen der Nutzungshäufigkeit des Elektromotors und des Verbrennungsmotors berechnet wird – auf der Grundlage von Laborergebnissen und nicht, wie von der Kommission gefordert, anhand von Daten aus dem realen Fahrbetrieb ermittelt werden sollte. Diese Änderung wird den Automobilherstellern helfen, mehr Plug-in-Hybride zu verkaufen und gleichzeitig die übergeordneten Emissionsziele zu erreichen.

Als Gegenleistung für diese Emissionszugeständnisse schloss sich Deutschland der Forderung Frankreichs an, den Geltungsbereich der „Made in Europe“-Regelungen im Rahmen des „Industrial Accelerator Act“ der EU in Bezug auf den Automobilsektor einzuschränken.

Der Text gilt nur für die 27 EU-Mitgliedstaaten und wird unter bestimmten Voraussetzungen auf das Vereinigte Königreich ausgeweitet.

Der EU-Industriekommissar Stéphane Séjourné erklärte am Dienstag gegenüber POLITICO, er unterstütze das Abkommen als Weg aus der Sackgasse, und fügte hinzu, dass das Vereinigte Königreich derzeit die Voraussetzungen für das Label „Made in Europe“ erfülle.

Die Vereinbarung könnte den Stillstand sowohl bei der CO₂-Verordnung als auch beim IAA beenden, bei denen Frankreich und Deutschland bisher auf gegensätzlichen Seiten standen. „Die Bestandteile dieses Gesamtpakets sollten so schnell wie möglich und gleichzeitig verabschiedet werden“, schrieben die beiden Länder.

Die britische Regierung begrüßte die mögliche Einbeziehung des Vereinigten Königreichs in die „Made in Europe“-Vorschriften für Kraftfahrzeuge.

„Dies ist ein deutsch-französischer Vorschlag, und es muss noch ein europäischer Prozess durchlaufen werden, aber sollte er bestätigt werden, begrüßen wir das Ziel, das Vereinigte Königreich in den ‚Industrial Accelerator Act‘ einzubeziehen – das wäre eine gute Nachricht für die britische Automobilindustrie sowie für die Arbeitsplätze und Investitionen, die sie im gesamten Vereinigten Königreich sichert“, erklärte ein Sprecher von Downing Street Nr. 10 in einer Stellungnahme.

Sollte der deutsch-französische Deal unterschrieben werden, muss es noch von den anderen EU-Mitgliedstaaten und vom Europäischen Parlament gebilligt werden, die derzeit über das „Industrial Accelerator Act“ und das Automobilpaket, einschließlich der Emissionsziele für Automobilhersteller, beraten.

Carlo Martuscelli, Francesca Micheletti und Graham Lanktree haben zu diesem Bericht beigetragen.

BRUSSELS — Ukrainian President Volodymyr Zelenskyy will make a direct pitch to European leaders for more help on Friday, amid a crisis of faith among allies over Donald Trump’s latest steps favoring Russia. 

At the second day of an EU summit in Brussels, Zelenskyy joins European prime ministers and presidents as they discuss Ukraine’s need for more weapons and cash, with concern growing that Kyiv faces a shortfall of billions of euros next year. 

The reality of the threat to European security from the four-year-long war penetrated the summit bubble after air drones hit two ships in or near Romanian waters, prompting emergency talks with NATO.

“We all in Europe want this war to end,” Zelenskyy said on social media as he arrived in the Belgian capital on Thursday. “And for that, signals of strength are needed — more real pressure on Russia and more defense support for Ukraine.”

It is especially important, Zelenskyy said, to “act together to protect lives.” But unity among European leaders is in short supply at a meeting already riddled with tensions. 

EU governments are pitted against each other in their own fraught negotiations over how much money to commit to the 27-country bloc’s budget. With populists surging, discontent raging and elections scheduled in major power centers across the continent, under-pressure leaders are a long way from approaching a deal.

That’s the combustible mix of financial discussions the U.S. president waded into.

Trump’s decision to open up American markets to previously banned Russian diesel — intended to ease price pressures in the U.S. — risks tilting the balance of an expensive war in Russia’s favor, three European officials warned. Putin’s war chest can now swell from additional fossil fuel exports, while Ukraine struggles for cash. 

As they arrived for the first day of the marathon two-day gathering on Thursday, EU national leaders began informally discussing options for how to help redress the balance. That discussion should to be picked up again around the summit table on Friday.

Russian assets

One idea rapidly rising back up the agenda is the fraught question of whether, or how, to make use of some hundreds of billions of euros of frozen Russian financial assets held in European banks. 

The bulk of these rest with the Euroclear depository in Brussels. A previous attempt to grab the funds and send them directly to Kyiv was blocked by the Belgian government ― and other countries less prominently ― over concerns it would be exposed to legal action. 

But Sweden, Finland and Germany want to take another look at the assets. The European Commission is to come up with a new detailed assessment of Ukraine’s funding needs and an options paper on how to help, including the use of assets, according to officials from these countries. 

As the summit began, German Chancellor Friedrich Merz said he had been urging his counterparts to “do everything we can to help Ukraine get through the winter and continue to support it next year as well.” 

“We will also have to increase funding once again in order to provide Ukraine with truly long-term assistance,” he said. “I remain firmly convinced that we are not only defending Ukraine’s territorial integrity, but also the political order of Europe, which is truly under pressure from Russia in every respect.” 

A German official earlier suggested that of the available options to help Ukraine, including a loan and direct grants from national governments, using the assets was the most viable way forward and should be “discussed.”

A U.S. proposal to unfreeze some of the Russian assets and transfer them to a U.S.-controlled entity so Washington could use them as leverage in peace talks with Moscow also attracted strong criticism.

Merz told reporters that the assets had been frozen in Europe and “should remain frozen in Europe … That is our business, and we will decide on it.”

‘Try again’

Finland’s Prime Minister Petteri Orpo told POLITICO as the summit began: “The best solution would be that we will have a solution on how to use frozen assets … We have to try again.” 

Sweden is also backing the move to re-examine options on using the assets to help Ukraine’s future funding needs. “Doing nothing is not an option,” Swedish EU Affairs Minister Jessica Rosencrantz told POLITICO. “The Commission is looking into different financial options, and we need to get them on the table quite soon,” she said. 

Leaders at this week’s summit should “be really honest that Ukraine needs increased financing” and that the EU “must really step up,” she added.

Zelenskyy met Belgian Prime Minister Bart De Wever, the main opponent to a deal on assets, for talks on Thursday and thanked him for his country’s support so far.

Speaking to reporters after the first day of the summit, De Wever said the assets should be looked at as part of a future peace agreement. “Are there people on this planet who maybe dream of doing it differently this time and operationalizing those assets earlier for certain purposes? The answer to that question is: Yes there are,” he said. “Are they in this building? They are. Are there outside this building? Yes there are. Do I want to talk about it? No, I don’t.”

For Finland’s Orpo, Trump’s “terrible deal” with Putin on diesel, and the apparent U.S.-imposed limits on Starlink technology to help Ukraine counter Russian attacks, are hard to understand.

“My message to [Trump] is that we are allies,” Orpo said in an interview. “We are in NATO. And what is the biggest threat against NATO? It’s Russia — and that is why there is no logic. I don’t have answers. I have many questions.” He said Trump may be focusing on winning votes ahead of next month’s midterm elections in the U.S. but he should remember that his real allies lie in Europe and he should not “trust” Putin. 

Election anxiety

Finland holds its election next year at the same time as what could be a seismic contest in France. Far-right leader Marine Le Pen is leading the polls for the French presidency and wants to cut aid to Ukraine and slash the EU’s budget. 

French President Emmanuel Macron, who is constitutionally barred from standing next year, warned EU leaders that they must get a deal on the bloc’s next budget by December, otherwise it will be too late. 

But the 27 leaders remain split and show no signs of bridging the gap between “frugal” countries like Germany, Sweden and the Netherlands, who want to limit the settlement, and others such as Italy and Romania, who are on the side of bigger pots of cash for regional development and farming. 

European Council President António Costa also sees the urgency. He believes a deal before the end of the year is not only necessary but achievable, according to two EU officials.

Costa, who is taking over the negotiations from Ireland in its role at the helm of the rotating presidency of the Council of the EU, believes failing to secure a deal by December would push the entire budget negotiating process beyond the electoral cycle. That would potentially delay a deal until October next year — perilously close to the new EU budget taking effect in January 2028. 

In an effort to make progress on the budget talks, EU leaders will return to Brussels for an extra summit next month.

Camille Gijs, Hanne Cokelaere and Gregorio Sorgi contributed reporting.

BRUSSELS — France and Germany on Thursday failed to agree a common position on the scope of the bloc’s future “Made in Europe” rules, as well as on greater flexibility for CO2 emissions cuts and the 2035 combustion engine ban. 

The draft quid-pro-quo deal, which was first reported by POLITICO in July, marks a major convergence between the two countries and had been expected to be signed imminently. On Thursday evening, however, the agreement stalled amid opposition from Germany’s Social Democratic Party, the center-left junior partner in the ruling coalition, over concerns it dropped key environmental targets.

“A final agreement has yet to be reached,” a German government spokesperson said.

Earlier this week, French President Emmanuel Macron had suggested the ball was in the German court. “There are political constraints on the other side of the Rhine, and I completely respect coalition discussions,” Macron said Monday on the sidelines of the Paris car show.

Under the terms of the proposed deal, Germany would accept stricter Made in Europe criteria for the automotive sector in the Industrial Accelerator Act, which France has pushed for, in exchange for weakening the combustion engine ban, one of Berlin’s long-term demands.

“In light of the significant technological, economic and geopolitical changes since the existing regulatory framework was established, the Automotive Package should strike a better balance between climate objectives, industrial competitiveness, technological development and the strengthening of European value creation,” the two countries wrote in a draft agreement obtained by POLITICO.

“Based on the Franco-German Ministerial Councils in 2025 and 2026, Germany and France therefore propose a balanced negotiating package combining ambitious CO₂ reduction targets with additional flexibility and targeted incentives for European value creation,” the agreement adds.

Currently, the EU’s target is for companies to reduce combustion engine emissions by 100% from 2021 levels by 2035, with the possibility to ‘earn’ 10% of emissions leeway through initiatives like offsets and investments.

Under the proposed deal, France and Germany want to soften the 2035 target to 90%, and to offer a further 10% leeway in exchange for investments in alternative fuels (for a combined 80%).

Crucially for steel manufacturers and Germany’s leftist SPD, the French-German agreement would axe the green steel investment requirement, removing a key incentive.

“This destroys the lead market for the steel industry,” an industry lobbyist told POLITICO on condition of anonymity to discuss the sensitive topic. In failing to put pressure on automakers to source green steel, the draft deal makes it a “nice-to-have” extra, they explained.

In a concession to Berlin, the draft agreement stresses that the so-called utility factor — which calculates plug-in hybrid emissions based on how often a vehicle’s electric motor is used vs. its combustion engine — should be calculated on lab-based results rather than real-world data, as required by the Commission. The change will help automakers sell more plug-in hybrids while still reaching the broader emissions targets.

In exchange for these emissions concessions, Germany endorsed France’s demand that the scope of the Made in Europe rules under the bloc’s Industrial Accelerator Act be restricted when it comes to the automotive sector.

The text only covers the EU’s 27 member countries and will be extended to the U.K. under certain conditions.

EU industry chief Stéphane Séjourné told POLITICO on Tuesday that he supported the deal as a way of breaking the impasse, and said the U.K. currently qualifies for Made in Europe. 

The agreement could resolve a stalemate over both the CO2 regulation and the IAA, in which France and Germany have been on opposite sides. “The elements of this combined package should be adopted as soon as possible and at the same time,” the two countries wrote.

The British government welcomed the potential inclusion of the U.K. in the Made in Europe rules for cars. 

“This is a Franco-German proposal and there is still a European process to run, but if confirmed, we welcome the objective to have the U.K. included in the Industrial Accelerator Act, and this would be good news for the British automotive industry and the jobs and investment it supports across the U.K.,” a No. 10 official said in a statement.

If approved, the comprehensive Franco-German deal will still have to be approved by other EU countries and by the European Parliament, which are currently discussing the Industrial Accelerator Act and the automotive package, including emissions targets for automakers.

Carlo Martuscelli, Francesca Micheletti and Graham Lanktree contributed to this report.

BRÜSSEL — Die EU will sich im Wettbewerb mit China voraussichtlich besonders auf die Chemieindustrie und den Maschinenbau konzentrieren. Das sagten zwei mit den Gesprächen vertraute Personen gegenüber POLITICO.

EU-Kommissionspräsidentin Ursula von der Leyen werde den Staats- und Regierungschefs am Donnerstag voraussichtlich mitteilen, dass Brüssel nach Möglichkeiten sucht, diese beiden Branchen zu schützen, so die Personen, die wegen der Vertraulichkeit der Beratungen anonym bleiben wollten. Als derzeit wirksamstes Instrument gelten dabei Safeguards, da sie von der EU schnell und breit angewendet werden können.

Handelskommissar Maroš Šefčovič schloss vergangene Woche ein Abkommen mit Peking, wonach die jährlichen Importe chinesischer Hybridautos im nächsten Jahr auf 350.000 Einheiten begrenzt werden sollen – weniger als die Hälfte der für dieses Jahr erwarteten Lieferungen. Die Staats- und Regierungschefs haben gefordert, weitere Sektoren vor den stark steigenden chinesischen Importen zu schützen, da das bilaterale Handelsdefizit weiter wächst.

EU-Hersteller stehen unter dem Druck billiger Importe aus China, was zu einer Welle von Entlassungen und Werksschließungen im gesamten Binnenmarkt führt.

Bei einer Rede in Peking in der vergangenen Woche erklärte Šefčovič, das Abkommen über Hybridfahrzeuge solle als „Vorlage“ für andere Branchen dienen. Ein hochrangiger Beamter der Kommission teilte am Montag mit, dass die Kommission auch Beschwerden über chinesische Importe aus der Windkraft- und der Möbelindustrie erhalten habe.

Beamte der Kommission arbeiten derzeit an Schutzmaßnahmen für Kunststoffe und Epoxidharze, doch wurde bislang noch keine formelle Untersuchung eingeleitet, die den Schutzmaßnahmen vorausgehen müsste.

Dieser Artikel erschien zuerst auf Englisch.

BERLIN — The European Commission needs the power to act much faster against trade threats, German Chancellor Friedrich Merz and French President Emmanuel Macron urged in a joint letter on Monday.

The leaders of the EU’s two most powerful and populous countries want Brussels to be able to act more quickly and decisively in a trade confrontation — while making it harder for EU capitals to block action.

The proposal seeks to strengthen the hand of Trade Commissioner Maroš Šefčovič, who flies to Beijing on Thursday for the final round of talks in a four-month process where Brussels is seeking to rebalance the EU’s trading relationship with China.

Merz and Macron said the Commission should be empowered to restrict, or even completely cut off, imports from countries seen as creating “severe and systematic distortions” in the single market. In their letter and a joint position paper, they call for urgent action, saying the EU’s existing trade defense toolbox “does not suffice anymore.”

“Without delaying the full use of the existing set of instruments, we need a comprehensive framework to complement our toolbox with new legal instruments — in a lean and non-bureaucratic way,” they wrote.

One senior German official, who was granted anonymity to speak candidly, described the tool as a “second-strike weapon” that could be deployed in the event of an escalating trade war.

“We can see that certain players have important, powerful instruments at their disposal,” the official said, pointing to the sweeping so-called Section 301 tariffs imposed by U.S. President Donald Trump and China’s dominance of critical-mineral supply chains. The EU, they explained, needed its own countermeasures. 

“When trade rules are not respected, we need to be credible regarding the fact that access to the internal market cannot be guaranteed,” said an official from Macron’s office, noting that “dialogue does not preclude our determination to protect our most vulnerable sectors.” 

The French official said the procedure for activating the new measures should be based on the one that already exists for anti-dumping cases. This allows the Commission to take action without first seeking a green light from EU capitals. 

“We can’t keep waiting — for months or sometimes even years,” the French official said. 

A new bazooka

While the joint letter doesn’t mention China by name, it clearly relates to the bloc’s €1-billion-a-day trade deficit with the world’s leading exporter and growing concerns about the impact of Chinese overcapacity on European industry.

The existing Anti-Coercion Instrument, also known as the EU’s trade “bazooka,” in theory gives the Commission enormous powers to restrict imports in response to actions that are considered economic coercion.

In practice, however, activating the ACI requires months of investigation and the support of a qualified majority of EU governments. Divisions among capitals have previously complicated efforts to agree on trade measures targeting China.

The new instrument proposed by Berlin and Paris — which could either update or replace the ACI — would make it much harder for EU member countries to block swift action. Commission measures would stand unless a “reverse” qualified majority of countries voted to block them. 

Bernd Lange, who heads the European Parliament’s trade committee, welcomed the Franco-German letter as a step forward. The German Social Democrat negotiated on behalf of the Parliament during the development of the ACI, pushing unsuccessfully to give the Commission more leeway to activate the instrument. 

“It was so complicated,” Lange said. “If there is now a shift in the mindset of the Council, it’s really good.” 

Watershed moment

Sander Tordoir, chief economist at the Centre for European Reform, called the letter and position paper a “watershed” moment. 

“What the two leading European capitals are signaling is that they want to flip the switch and have a more structured, comprehensive set of policies to slow down the impact of the second China shock on European industry,” said Tordoir, who has advocated that Europe adopt U.S.-style 301 tariffs in the past.  

Germany’s shift toward a more aggressive trade posture is particularly significant given Berlin’s previous reluctance to back stronger EU trade defenses.

“One of the major actors watering down the ACI back in the day was in fact Germany,” Tordoir said. “Germany has transitioned from hesitator-in-chief on stronger European trade tools to actively backing a number of concrete proposals.” 

The document is part of broader Franco-German negotiations on the EU’s top economic files. The talks were launched by Macron and Merz after a joint ministerial meeting in Cologne in July, when the two leaders said they were converging on a more aggressive stance toward China. 

The Franco-German letter also calls on the Commission to take new steps to diversify European supply chains and lessen dependency on Chinese imports. The Berlaymont has already announced that it is developing a diversification instrument aimed at encouraging manufacturers to wean themselves off cheap Chinese imports. It plans to publish the proposal by the end of the year.

EU leaders will discuss the outcome of Šefčovič’s trade mission to China at a summit in Brussels on Oct. 15-16. 

Hans von der Burchard reported from Berlin, Giorgio Leali from Paris and Carlo Martuscelli, Jordyn Dahl and Camille Gijs from Brussels. This article has been updated.