The European Union is preparing a new instrument to protect its market against imports from China. France and Germany propose a rapid response

The European Union may introduce a new instrument enabling it to rapidly restrict access to the Single Market in cases of serious distortions of competition caused by third countries. France and Germany have presented a joint initiative aimed at more effectively protecting European industry, particularly against the consequences of excessive subsidies, dumping and growing import pressure from China. The proposal has already received a positive response from the European Commission.

On 5 October 2026, French President Emmanuel Macron and German Chancellor Friedrich Merz sent a joint letter to European Commission President Ursula von der Leyen, accompanied by a strategic document addressing ways to strengthen Europe’s economic resilience and counter global imbalances and practices that distort competition.

The initiative envisages a significant strengthening of the EU’s trade defence policy. Its key element is a proposal to establish a mechanism enabling decisive action to be taken much more quickly than is currently possible.

Why Does the European Union Need a New Instrument?

Existing trade defence instruments, including anti-dumping duties, countervailing duties and safeguard measures, allow the EU to respond to specific trade practices and market disruptions. However, their application requires relevant investigations, which can take many months to complete.

In the view of France and Germany, these mechanisms do not always enable a sufficiently rapid response to systemic distortions of competition, particularly in situations involving a sharp increase in imports of products originating from economies benefiting from extensive state support.

The problem concerns not only the prices of individual goods, but also the ability of European businesses to maintain production, invest in new technologies and compete with manufacturers from outside the EU.

The joint Franco-German document points out that protection limited to narrowly defined product categories may be insufficient when dealing with distortions affecting entire sectors and value chains.

A New Mechanism – The Possibility of Almost Immediate Restrictions on Access to the EU Market

The most far-reaching proposal concerns the creation of a new instrument allowing the European Commission to respond rapidly in situations where actions taken by a third country lead to serious and systemic distortions of competition in the EU market.

The mechanism would enable measures restricting access to the Single Market to be imposed, depending on the nature of the identified threat.

One of the solutions under consideration is the introduction of additional trade restrictions, including tariff measures. However, the final range of possible measures has not yet been determined.

A particularly important aspect is the proposed change to the decision-making process.

France and Germany are advocating the use of a reverse qualified majority voting mechanism. Under the proposed model, measures put forward by the European Commission could be adopted unless a qualified majority of Member States opposed their implementation.

Such a solution could reduce the risk of protective measures being blocked and enable decisions to be taken within just a few days.

However, this does not mean that the European Commission already has such powers. Their introduction would require the adoption of appropriate EU legislation.

Protecting Entire Economic Sectors Instead of Individual Products

The Franco-German proposal is not limited to establishing a single new mechanism.

It also envisages broader and more effective use of existing trade defence instruments, particularly through:

• More frequent initiation of investigations by the European Commission on its own initiative;

• Broader investigations covering entire economic sectors rather than only narrowly defined product groups;

• More effective measures to counter the circumvention of trade defence measures;

• A review of the rules governing the calculation of certain protective duties and the streamlining of procedures.

The sectors identified as requiring urgent attention include the chemical industry, PET products and hybrid vehicles.

A shift towards protecting entire sectors could also have broader implications for other branches of European industry facing growing import competition.

What Could the New Measures Mean for Polish Manufacturers?

From the perspective of Polish industry, particularly important is the possibility of taking greater account of the scale of distortions of competition and their impact on businesses operating in the EU market.

This applies, among other things, to industries in which European manufacturers compete with imports from countries characterised by different production costs, state subsidy arrangements or regulatory conditions.

The potential significance of the new instruments can be considered in relation to the chemical, automotive, machinery, metal and ceramics industries. However, this does not mean that these sectors will automatically become subject to additional protective measures.

What may prove particularly important is the change in the way threats to the competitiveness of European manufacturing are identified.

Instead of focusing exclusively on a specific product and its direct import competition, the European Commission could be given tools enabling it to take account of the broader nature of market distortions.

For manufacturers, this could potentially create greater opportunities to demonstrate the impact of import pressure across entire sectors and their associated supply chains.

For importers and businesses relying on supplies from outside the European Union, the new measures could mean the need to account for additional trade, cost and logistics risks.

Will the New Instrument Target China Exclusively?

Although the initiative emerged against the backdrop of growing economic tensions between the European Union and China, the proposed instrument is not intended to be formally limited to a single country.

According to the underlying assumptions, it would make it possible to respond to serious distortions of competition regardless of their country of origin.

This means that its potential application could cover a broader range of practices and economic circumstances, provided that the conditions established in future legislation are met.

At the same time, it will be necessary to develop rules ensuring that any measures taken are proportionate, take into account the interests of EU businesses and consumers, and comply with relevant international obligations.

European Commission Announces Further Action

The Franco-German initiative has received a positive response from the European Commission.

On 16 October 2026, following a meeting of the European Council, Ursula von der Leyen announced plans to develop a new instrument enabling rapid restrictions on access to the Single Market, directly referring to the proposal put forward by France and Germany.

The European Council also called for an urgent strengthening of EU instruments designed to address global economic imbalances.

On 21 October 2026, the Commission President reiterated in the European Parliament the need to establish a mechanism allowing the EU to respond rapidly to threats to its economic interests.

At the same time, the Commission announced that it would present the DiversifyEU package in December 2026, aimed at reducing European businesses’ excessive dependence on individual sources of supply.

These are, however, separate initiatives.

As of 2 November 2026, no legislative proposal establishing the new instrument for restricting access to the Single Market has yet been presented. The European Commission has also not indicated a specific date for the publication of such a proposal.

A New Direction for EU Trade Policy

The Franco-German initiative signals the possibility of a significant change in the European Union’s approach to protecting the competitiveness of its own industry.

Until now, trade defence policy has focused primarily on applying specific instruments to particular practices and product categories. The new proposals envisage the creation of a mechanism enabling a faster and broader response to systemic market distortions.

For European businesses, both the speed of decision-making and the scope of future protective measures could prove significant.

From the perspective of Polish industry, the key issue will be whether the proposed legislation will genuinely enable more effective protection for sectors particularly exposed to import pressure, while avoiding a disproportionate increase in costs for businesses relying on foreign components and raw materials.

In the coming months, particular attention should be paid to the scope of the proposed instrument, the procedures governing its activation and its relationship with existing anti-dumping, anti-subsidy and safeguard measures.

Contact

Krzysztof Wiński Managing Partner, T&P Advisory | Thedy & Partners
E-mail: krzysztof.winski@thedy.pl
Tel.: +48 519 506 434

Łukasz Pamuła Senior Manager, T&P Advisory | Thedy & Partners
E-mail: lukasz.pamula@thedy.pl
Tel.: +48 519 504 779