France and Germany urge EU to build rapid trade retaliation tool

France and Germany have proposed that the European Union adopt a new measure that could quickly strike back against countries that harm the bloc economically, Reuters reported on Monday (Oct 5). The new measure would not target any specific country.

German Chancellor Friedrich Merz and French President Emmanuel Macron set out the proposal in a letter sent on Monday to European Commission President Ursula von der Leyen, urging Brussels to expand the bloc’s trade toolbox against what they call the weaponisation of trade, market-distorting practices and macroeconomic imbalances.

The instrument would allow the EU to react quickly when vital supplies are restricted, including an immediate cut-off from the internal market if needed.

Berlin’s backing marks a notable change for Germany, long one of Europe’s strongest advocates of free trade, amid mounting strain on German industry from low-cost Chinese electric vehicles and US tariffs.

German officials said the EU needed a tool as powerful as the Section 301 tariffs of the United States or China’s critical-mineral export restrictions.

Merz and Macron suggest the instrument could be triggered by a minority of member states rather than the usual qualified majority. One German official described the proposal as a “second-strike weapon” designed to inflict damage comparable to that caused to Europe by coercive trade measures.

Background: officials described the instrument five days ago as allowing the EU to cut China off from the European market within 24 hours; China called the idea “typical protectionist and unilateralist” (South China Morning Post).