Merz and Macron Want an Emergency Off-Switch for the Single Market: China Is Not Named, but Meant

On Monday Germany and France presented a joint trade paper designed to give the EU much sharper tools against market distortions. Chancellor Merz and President Macron wrote to Commission President von der Leyen about it. At its heart is a new instrument: if a third country refuses to restore fair competition, the EU should be able to respond systemically, up to an immediate restriction of access to the single market. It would be triggered by reverse qualified majority, meaning it goes ahead unless enough member states object. Chemicals, PET plastic and hybrid vehicles are flagged as urgent.

China is not mentioned once in the entire paper. That is diplomatically elegant and roughly as subtle as a "No pandas" sign outside a zoo. Ten days later, EU leaders meet in Brussels to discuss trade imbalances with Beijing.

Free trade remains a compelling principle. It is most compelling while your own industry is winning.

For Germany this is a delicate balancing act. Few countries depend so heavily on the Chinese market; VW, BASF and the machinery sector earn a lot of money there. At the same time German industry is losing market share in chemicals and cars to Chinese rivals that Berlin considers state-backed. The result is a policy that wants to secure access to China's market while keeping Chinese firms out of Europe's. Beijing will read the paper closely. Even without its name in it.