What Macron and Merz are asking for

France and Germany have put forward a new legal tool that would let the EU respond rapidly to trade wars, or to measures such as dumping that could economically harm the bloc. President Emmanuel Macron and German Chancellor Friedrich Merz set out the request in a joint letter to European Commission President Ursula von der Leyen, seen on Monday, calling for a new legal arsenal to answer a potential trade war with China faster.

In the letter, Macron and Merz wrote that the Commission needs a credible instrument at its disposal, one that would include, if needed, the power to cut off access to the European single market.

Built for speed

Speed sits at the core of the design. Germany and France want the Commission to hold the power to respond to trade aggression within days. Under the proposal, such action would not need approval from the EU's 27 countries, although a weighted majority of member states could block it. The tool could be deployed in a trade war, for example if a country were to cut off supplies of critical raw materials.

A German government source laid out the thinking behind the request:

• •the EU would have to be able to inflict damage comparable to what it suffers
• •the United States and China could retaliate faster and more robustly in any trade war
• •the EU's existing tools, the source warned, are not as effective

China, unnamed but central

The letter stopped short of naming China explicitly; Macron and Merz said the proposal was not a direct response to the actions of any particular country. It went out just days before the EU trade commissioner heads to Beijing to tackle trade frictions.

The tool could be used against any country, yet the EU's biggest trade concern is its deficit with China, which Brussels says is harming key European sectors. That deficit hit around 360 billion euros (around $400 billion) last year, meaning the EU imports far more from China than it exports there. European companies report being undercut on prices by Chinese rivals in sectors ranging from steel for wind turbines to semiconductors and batteries, and Europe depends heavily on Chinese supplies of critical raw materials.

Existing plans and the next step

The Commission is already working on new tools to protect its industries; one option under consideration is a European equivalent of the US "Section 301", the trade tool Washington uses to probe foreign practices it deems discriminatory and retaliate with tariffs. Macron and Merz also want a new tool to reduce European dependencies. The two leaders are expected to present their ideas at an EU leaders' summit next week in Brussels.