FX.co ★ Germany and France propose mechanism to shut EU market to China

Germany and France have urged EU leaders to set up a mechanism for rapidly closing the European market to Chinese goods. According to Bloomberg, Brussels needs such a tool in case of a large‑scale trade conflict with Beijing. The main concern is that China’s authorities could completely halt exports of rare earth metals — supplies of which are critical for advanced technologies, microchips, and the EU’s green‑energy transition.

The initiative’s authors note that trade is increasingly being used as a tool of political pressure. Berlin and Paris are pushing for investigations into Chinese subsidies, particularly in shipments of polymers, chemical products, and hybrid vehicles sold at allegedly depressed prices. If violations are confirmed, European authorities intend to impose direct protective tariffs.

The situation is made more acute by a record imbalance: European Commission President Ursula von der Leyen said the trade deficit with China has reached a critical level — billions of euros a day. Brussels fears the erosion of its own industrial base under a flood of cheap imports. The new barrier is intended to support local businesses and reinforce the security of supply chains.