BRUSSELS, Belgium – France and Germany proposed a rapid European Union trade response mechanism on Monday, seeking faster retaliation against countries accused of harming European industry through dumping, heavy subsidies, export restrictions or other market distortions.
Paris and Berlin released the plan ahead of an EU leaders’ summit in Brussels, where trade imbalances with China will sit high on the agenda.
French President Emmanuel Macron and German Chancellor Friedrich Merz signed a letter urging the European Commission to strengthen Europe’s trade defence architecture.
“We need a comprehensive framework to complement our toolbox with new legal instruments, in a lean and non-bureaucratic way,” Macron and Merz wrote.
Their proposal would give Brussels a quicker route for countermeasures when a foreign state creates sustained economic distortions. German officials compared the desired strength with United States Section 301 powers and Chinese restrictions on exports of critical minerals.
The plan names no target country. Its language focuses on systemic distortions, industrial subsidies, dumping and restrictions on currency convertibility. European officials have repeatedly raised similar complaints during discussions with Beijing.
China therefore sits at the centre of the policy debate even without formal designation in the proposal.
The EU recorded a goods trade deficit with China of about €360 billion during 2025. Chinese exports to Europe have expanded across electric vehicles, batteries, machinery, chemicals, textiles and other manufactured goods. European governments argue state support and excess industrial capacity place pressure on domestic producers.
Beijing rejects broad accusations of unfair competition. Chinese officials describe several European trade measures as protectionist and warn retaliatory action would follow discriminatory restrictions.
The Franco-German document proposes two additional instruments.
The first would reduce dependence on single-country sources for strategically important supplies. Critical minerals, battery inputs, industrial components and selected technologies sit among Europe’s main economic-security concerns. Supply concentration creates exposure when an exporting country restricts licences, changes quotas or introduces political conditions.
The second instrument would restrict access to the EU single market for countries whose economic or political measures undermine fair market conditions. Paris and Berlin want the European Commission to move faster once evidence meets the required threshold.
The governance mechanism also matters.
Under the proposal, Commission countermeasures would take effect unless a qualified majority of member states opposed them. Such a model would lower the political hurdle compared with trade actions requiring affirmative support before implementation.
German officials said Brussels should act within days when serious economic harm emerges.
Any new legal instrument still requires approval from EU governments and the European Parliament. Negotiations will therefore test divisions among member states with different levels of exposure to Chinese trade and investment.
Germany carries deep commercial links with China, especially across automobiles, machinery, chemicals and industrial equipment. France has pressed for stronger European industrial policy and tighter trade defence measures. Their joint position gives the proposal greater weight before the next leaders’ meeting.
EU Trade Commissioner Maroš Šefčovič also heads to Beijing this week for talks with Chinese Commerce Minister Wang Wentao. The meetings will focus on market access, rising Chinese exports, European sales into China and licensing arrangements for critical raw materials.
Šefčovič described the intensity of negotiations during earlier discussions.
“We have now unprecedented intensity of our negotiations,” Šefčovič said, describing repeated contacts between European and Chinese officials.
He also warned in September of “harsher measures” if talks failed to produce concrete results by October.
Those talks now sit beside the Franco-German proposal.
For manufacturers, the dispute concerns price formation, subsidies and production capacity. European companies face imported products priced below levels many domestic producers regard as sustainable. Chinese firms argue scale, supply-chain integration and manufacturing efficiency explain much of their cost advantage.
Trade defence law requires evidence. Anti-dumping investigations examine whether exporters sell products below normal value and whether such pricing injures domestic industry. Anti-subsidy investigations examine state support and measurable injury. Safeguard measures address sudden import surges under separate legal tests.
The new Franco-German plan seeks a broader response to persistent economic pressure extending beyond one product investigation.
Critical minerals form another major concern. Europe depends heavily on China for processing and supply of several inputs supporting batteries, electronics, renewable-energy equipment and defence systems. Export controls therefore affect factories far beyond raw-material markets.
A supply interruption hits inventories, production schedules and capital expenditure. Firms then search for alternative suppliers, often at higher cost.
Paris and Berlin want diversification before disruption reaches industrial production.
For China, access to the European single market carries major commercial value. Europe also relies on Chinese manufacturing capacity across consumer goods and industrial supply chains. Aggressive restrictions therefore carry costs for both sides.
A trade confrontation would raise prices, disrupt investment decisions and force companies to redesign sourcing strategies. Automakers, battery producers, chemical groups and machinery companies face particular exposure.
The timing adds pressure. EU leaders will discuss Chinese trade imbalances in Brussels within days. Šefčovič then enters Beijing talks with stronger political backing for enforcement if negotiations fail.
The United States has already normalised broader tariff actions through Section 301 and other trade statutes. China uses export licensing, anti-dumping investigations and industrial policy to protect strategic interests. France and Germany now want Europe to respond with comparable speed while remaining inside EU law.
For businesses trading across Europe and Asia, the next steps deserve close attention. New restrictions would affect customs costs, sourcing contracts, investment plans and market access. Companies with concentrated supply chains face greater exposure.
The proposal marks a significant shift in European trade policy. Paris and Berlin want fewer delays between evidence of economic harm and formal EU action. They also want trade policy tied more closely to industrial security.
The next test arrives in Beijing and Brussels.
If negotiations produce measurable concessions, pressure for immediate restrictions might ease. If talks fail, European leaders now possess a detailed Franco-German proposal for faster intervention
