France and Germany propose new EU trade tools

France and Germany want the European Union to expand its capacity to respond to external trade pressure and reduce vulnerabilities in its supply chains. French President Emmanuel Macron and German Chancellor Friedrich Merz presented their proposals in a letter to European Commission President Ursula von der Leyen. The initiative is not yet legislation or an EU policy that has been adopted: it must be discussed by the Member States, with a discussion scheduled for the European summit on 15 and 16 October in Brussels.

Two new instruments under discussion

The proposal puts forward, on the one hand, a diversification tool to reduce dependencies and concentrations in supply chains and prevent new ones from forming. The Franco-German document points to a gradual and selective approach, not a general break in trade ties. The areas identified include artificial intelligence, semiconductors, quantum computing, critical raw materials, batteries, clean energy components, biotechnology, and financial services.

The second idea is an emergency response mechanism for third countries that, according to the proposal, seek to undermine competitive conditions or respond to European trade measures. Options could include restrictions on access to the single market. One of the reports describes a possible activation by reverse qualified majority; this is a proposal, not a procedure currently in force. The mechanism is presented as applicable regardless of country, although China is at the centre of the debate on dependencies and trade tensions.

Greater enforcement of existing tools

Macron and Merz also call for more intensive use of existing trade defence instruments, such as anti-dumping investigations and safeguards. Their proposals include strengthening the EU’s investigative capacity and examining adjustments to the rules so that responses could cover sectors, not just individual companies. They also mention stricter controls on products that do not comply with European standards and possible restrictions on market access in cases of serious and persistent non-compliance, including in relation to small consignments.

The letter also addresses currency imbalances and calls for dialogue on the issue to resume between the Commission, the European Central Bank, and the Eurogroup. On industrial policy, it proposes moving towards a targeted and proportionate European preference in strategic sectors, as well as advancing an Industrial Acceleration Act before the end of 2026. The available documents do not specify which sectors would be covered by this preference or how it would be applied.

Commission welcomes the initiative; measures are still pending

Commission spokesperson Olof Gil described the letter as a valuable contribution to the debate. The Commission said the proposals fit with discussions on competitiveness and trade relations, but that assessment does not amount to approving them. Their development will depend on EU deliberations and on governments agreeing how to reconcile the protection of European companies with trade openness and dialogue with their partners.

Although the letter does not explicitly identify China, the initiative comes amid disputes over subsidies, access to critical raw materials, and competition from Chinese exports. It also coincides with negotiations between Brussels and Beijing. According to the available reports, China has warned that a European show of force could harm trust, while trade investigations have taken place in both directions. These developments describe the context of tension; they do not prove that the proposals have already led to new European measures.

The balance between resilience and protectionism

For businesses, the debate could affect future conditions for market access, trade investigations, and expectations concerning suppliers in sectors considered strategic. However, the proposals do not in themselves create obligations for companies or change the rules currently in force. Their scope will depend on decisions made by EU institutions and on any texts that may eventually be put forward.

The main political challenge will be to define which dependencies justify intervention and according to what criteria, without turning diversification or trade defence into indiscriminate barriers. France and Germany want to give the bloc greater capacity to respond; the European debate will have to determine whether these tools can strengthen economic security without intensifying retaliation or closing off channels for negotiation.