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Merz and Macron want the EU to hit back harder — and faster — against trade threats
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.
