Germany and France Push Trade Weapon to Bar China Access to EU Market

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Germany and France are urging the European Union to adopt new powers that would enable the bloc to cut off access to its single market if China or other nations destabilize trade relations.

The suggestion came in a letter, seen by Bloomberg News, sent Monday to European Commission President Ursula von der Leyen, the top EU executive.

“We need a credible instrument in the hands of the Commission to allow for decisive and systemic reaction,” the letter reads, suggesting “powerful measures up to an immediate cut-off from the internal market if needed.”

The letter also calls for an instrument that would force Europe to reduce various supply chain dependencies on foreign countries.

While the letter does not specifically mention China, the EU is currently exploring ways to rebalance its trade relationship with the country. Having Germany and France aligned behind these proposals will give them significant heft going into an EU summit next week, where leaders will discuss the issue.

The market-access tool should be seen as second strike weapon in an all-out trade war with a country like China, German officials said, speaking anonymously in line with government protocol. It could be deployed, for instance, if China blocked all exports of rare earth materials, which the EU relies on to build modern technologies.

“The European Union is faced with unprecedented challenges,” the Franco-German letter says, arguing that countries are weaponizing trade and distorting markets. “We need urgent action to address these threats, to diversify and to derisk.”

In addition to the new tools, Germany and France are urging the EU to more aggressively investigate whether entire sectors, such as chemicals, plastics and hybrid cars, are facing unfair competition from heavily subsidized imports. Such investigations could result in new tariffs.

Currently, such EU investigations tend to focus on specific products, not entire sectors.

EU leaders directed the commission in June to reengage with Beijing over the bloc’s trade deficit with China, which reached €360.6 billion ($404 billion) last year and continued to widen in the first half of 2026.

In response, EU Trade Commissioner Maros Sefcovic launched a new series of talks with Beijing. He will travel to China at the end of the week to get a sense of where things stand ahead of the upcoming summit.

In parallel, EU policymakers in Brussels are also exploring possible new trade measures to let the EU react more swiftly and with greater force to countries undermining trade relationships. They are also looking at measures to encourage supply chain diversification.