Merz, Macron seek tougher EU measures against unfair trade
Emmanuel Macron and Friedrich Merz have written to Ursula von der Leyen, calling for tougher EU mechanisms against unfair trade practices by other states. They name no names but seem to have China or the US in mind.
German Chancellor Friedrich Merz and French President Emmanuel Macron have called for more stringent EU measures to address unfair trade practices by other nations. They argue that the existing EU tools are inadequate. The appeal does not single out a specific country but appears to reference China's trade policies, the EU's substantial trade deficit with China, and its reliance on certain essential raw materials.
The United States is also a potential target, particularly under President Donald Trump's administration. This appeal arrived just days before the EU's trade commissioner, Maros Sefcovic, is scheduled to meet with Chinese officials. The letter to European Commission President Ursula von der Leyen proposes two new initiatives. The first seeks to promote diversification and prevent companies from becoming overly reliant on suppliers from individual nations.
The second would enable the EU to swiftly exclude a country from the European single market if extraordinary circumstances warrant it. Merz and Macron wrote that this could apply when third countries act to undermine fair market conditions and peaceful restoration through political or economic means, causing significant and systematic distortions to our single market.
The French and German leaders, both grappling with economic growth and public spending, highlighted the EU's challenges in maintaining global competitiveness and its dependence on certain suppliers of crucial materials. This situation creates geoeconomic risks, they noted, as the open and rules-based trading system is increasingly being undermined by the misuse of trade, practices that distort markets on a systemic level, and significant global macroeconomic imbalances.
This proposal is considered a "non-paper," an informal document intended to propose ideas and spark discussions without binding the signatories to a particular stance. The letter suggests empowering the Commission to exclude a country from single market access under extreme circumstances, a process that currently requires agreement from member states and is time-consuming.
It also recommends a more streamlined approach, where the Commission could initiate the exclusion process independently, with member states then having the option to block it through a qualified majority vote (requiring at least 55% of member states and 65% of the bloc's total population). The EU's trade deficit with China is substantial and expanding, with the bloc estimating the figure to be around €360 billion ($400 billion) in 2025, although China's statisticians give a lower estimate of $292 billion.
The EU also heavily depends on China for various raw materials, notably rare earths, and is increasingly reliant on both the US and China for high-tech imports and services, especially in computing and the artificial intelligence sector. The EU's trade commissioner, Maros Sefcovic, is set to visit China in the coming week for discussions, ahead of an EU leaders' summit scheduled for October 15-16.
Sefcovic previously expressed hope for tangible results on trade with China by the end of the year, though the outcome remains uncertain. China has warned of retaliatory measures if the EU's plans are perceived as threatening.
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