France and Germany are pushing the European Union toward a tougher era of trade policy, proposing a rapid response mechanism that could allow Brussels to retaliate against countries accused of seriously distorting competition.
French President Emmanuel Macron and German Chancellor Friedrich Merz outlined the proposal in a joint letter to European Commission President Ursula von der Leyen.
Reuters reports that Paris and Berlin want the EU to be able to respond within days when foreign economic practices threaten European companies, industries or critical supply chains.
The proposal does not formally target a specific country. But the concerns behind it point heavily toward China.
European governments have become increasingly worried about heavily subsidized imports, dumping, currency distortions and dependence on foreign suppliers for strategically important products.
The French and German proposal would create two major new instruments.
One would encourage Europe to reduce its dependence on individual countries or suppliers for critical products. The other could allow the EU to restrict access to its vast single market when a country deliberately undermines fair competition through political or economic measures.
Le Monde reports that the measures could ultimately allow Brussels to exclude goods and services from countries engaged in what European leaders consider a trade war against the EU.
The shift is particularly significant for Germany.
Berlin has traditionally been more cautious about aggressive trade restrictions because German manufacturers and automakers depend heavily on international markets, including China.
But that position is changing as Chinese competition places growing pressure on German industry.
Reuters reports that French and German officials believe existing EU trade defenses are no longer sufficient in a global economy where trade itself is increasingly being used as a strategic weapon.
The European Commission has already imposed tariffs on Chinese electric vehicles and taken measures to protect European steel producers. Paris and Berlin now want Brussels to have faster and broader powers.
Their proposal comes just days before EU leaders are expected to discuss trade imbalances with China and ahead of further negotiations between Brussels and Beijing.
The European Commission has welcomed the Franco German initiative as a contribution to its broader strategy on competitiveness and economic security.
Any new mechanism would still require approval from EU governments and the European Parliament.
But the joint move by Europe's two largest economies sends a clear signal: the EU is preparing to become considerably more aggressive in defending its market as global trade tensions intensify.
