Macron, Merz Push EU for Rapid Trade-War Response Tool

French President Emmanuel Macron and German Chancellor Friedrich Merz have urged the European Union to build a new legal arsenal to react faster to a possible trade war with China, according to France 24, citing a letter seen by AFP. The letter was sent to European Commission President Ursula von der Leyen just days before the EU's trade commissioner is due in Beijing to address trade frictions. The letter did not explicitly name China, the report said, but the two leaders want a credible instrument placed in the Commission's hands for decisive action.

Under their proposal, the Commission could respond to a trade aggression within days without needing approval from all 27 EU member states, though a weighted majority of countries could block such a move. The tool would include the power to cut off access to the European single market if needed. Macron and Merz are expected to present their ideas at an EU leaders' summit in Brussels next week.

A German government source said that if a country were to cut off supplies of critical raw materials, the EU must be able to inflict damage comparable to what it suffers. The same source warned that the United States and China could retaliate faster and more robustly in a trade war, and that the EU's current tools are not as effective.

The EU's largest trade concern is its deficit with China, which reached around 360 billion euros ($400 billion) in goods last year. European companies say Chinese rivals undercut them on prices in sectors including steel for wind turbines, semiconductors and batteries. Europe also relies heavily on Chinese supplies of critical raw materials.

The European Commission is already working on new instruments to protect EU industries, with one option being a European equivalent of the US Section 301 tool, which Washington uses to investigate foreign practices it considers discriminatory and to retaliate with tariffs. Macron and Merz also want a new tool to reduce European dependencies.