France and Germany ask the EC for new trade instruments vis-à-vis China

“ Sin delaying the full use of the existing set of instruments, we need a comprehensive framework that complements our arsenal with new legal instruments, in a simple and non-bureaucratic way”, defends French President Emmanuel Macron and German Chancellor Friedrich Merz in a letter sent to Ursula von der Leyen.

In the letter, those responsible point out that “the rules-based open trading system is being heavily affected by the instrumentalisation of trade, systemic practices that distort the market and global macroeconomic imbalances”, in an allusion to the illegal (such as state subsidies) measures allocated to China, which is still never mentioned directly.

In their view, these “serious and systematic distortions” are “damaging” for EU companies and innovation in the EU.

Therefore, “we need urgent action to address these threats, diversify and reduce risks”, they argue.

The main proposal is the creation of a new instrument to enable the European Commission to respond to serious distortions caused by third countries and may ultimately restrict access to the single market.

Such a mechanism should be quickly activable on the proposal of the Community executive unless a qualified majority is opposed, and should cover different practices, from subsidies to exchange-rate manipulation.

In parallel, France and Germany suggest an instrument to reduce European dependencies and diversify supply chains by preventing new import concentrations.

“ EU exporters continue to face significant non-tariff barriers. Meanwhile, the Union market remains widely open to products with record levels of non-compliance with European regulations, particularly as regards consumer safety,” warns Macron and Merz.

The initiative comes at a time of increasing pressure on trade relations between the EU and China.

Although China is not mentioned directly in the letter, Paris and Berlin point to problems that have been at the heart of trade relations between Brussels and Beijing, such as excessive subsidies, dumping, excess industrial capacity, trade barriers and exchange-rate manipulation.

The European Commission – which has the competence of trade policy in the EU – has encouraged China to adopt measures to reduce trade imbalances, while Chinese imports continue to increase in various European industrial sectors.

In 2025, Chinese products accounted for around €571 billion of EU imports, contributing to a European trade deficit with China of around €360 billion.

In an informal Franco-German document, which Lusa also had access to today, France and Germany call for a faster use of existing trade defence instruments and for the strengthening of controls on products entering the single market, also warning of the risk of retaliation.

Reacting to the European press, the spokesman for the European Commission’s trade protection, Olof Gill, welcomed the letter from Macron and Merz and the informal Franco-German document, considering them a “valuable contribution”, pointing out that the issue will be discussed at the European Council next week.