Merz (Friedrich Merz) and Macron (Emmanuel Macron), the leaders of the largest economies in the European Union, have called for immediate and more effective action from the EU against trade threats. In a letter they sent to EU officials, they emphasized that the current trade defense tools of the Union are no longer sufficient.
Need for New Tools
The letter does not explicitly mention China, but it clearly refers to the Union's daily trade deficit of one billion euros with the world's largest exporter. Merz and Macron have stressed that to tackle trade challenges, there is a need for a comprehensive framework that can complement current tools with new legal instruments.
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They wrote: "Without delay in fully utilizing the current set of tools, we need a comprehensive framework that adds new tools in a non-bureaucratic manner." The goal of these two leaders is to create a tool that allows Brussels to ban imports from specific countries.
Challenges and Consequences
This proposal comes on the eve of Maroš Šefčovič's trip, the EU Trade Commissioner, to Beijing for trade negotiations. These negotiations are, in fact, the final stage of a four-month process that Brussels hopes will lead to a better trade balance with China.
The anti-coercion tool, known as the EU's "bazooka" trade measure, theoretically gives the Commission significant powers to restrict imports in response to actions deemed economic coercion. However, in practice, activating this tool requires months of research and the support of a qualified majority of member states. Disagreements among capitals have previously complicated efforts to agree on targeted trade measures against China.
The new tool that Merz and Macron are seeking significantly complicates rapid action for member states. Commission actions will remain in place unless a reverse majority of countries votes to block them. A senior German official stated: "We need a tool that does not yet exist and does not even have a name, but its goal is to ensure a level playing field." This official described the tool as a weapon for a second strike.
EU leaders will review the results of Šefčovič's trade negotiations with China at their upcoming summit in Brussels.
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