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A European ‘kill switch’ against China. Merz and Macron want a weapon to combat those who distort competition
Berlin and Paris are calling on the Commission to introduce a mechanism that would allow countries using subsidies, dumping and overcapacity to distort competition to be excluded from the Single Market. The proposal marks a shift in Germany’s stance towards Beijing and will be put before the European Council in October
Photo: Ansa
Today, German Chancellor Friedrich Merz and French President Emmanuel Macron sent a letter to Commission President Ursula von der Leyen calling for a mechanism – including “strong measures, up to and including immediate exclusion from the single market” – against countries that distort competition within the EU. Neither the letter nor the attached ‘non-paper’ (an informal document) mentions China by name, and they call for the instrument to apply to any country. Yet both use the terminology typically employed to describe Chinese competition: "structural overcapacity", subsidies, dumping (selling abroad at below cost), and currencies kept below their market value to make exports cheaper – just as is the case with the yuan.
In any case, this marks a decisive shift in Germany’s stance towards China. On 4 October 2024, Olaf Scholz’s Germany voted against European tariffs on Chinese electric cars, which were nevertheless passed, whilst two years later Merz called for the creation of a ‘kill switch’ to be controlled by the Commission that could exclude a third country from the Single Market, unless a qualified majority of EU countries opposed it. In the ‘non-paper’, the two countries argue that defending individual goods (as in 2024) is no longer sufficient when a country dominates an entire sector or supply chain, whilst warning, however, that retaliatory measures could test the unity of European countries.
In 2025, compared with 2024, the EU spent 6.4 per cent more on Chinese goods and received 6.5 per cent less from European goods sold in China, with the EU’s trade deficit reaching €360 billion. On Thursday and Friday, Trade Commissioner Maroš Šefčcovicč will be in Beijing, as the deadline set by the EU in June approaches for China to make concrete commitments, including curbing the rise in exports to Europe. However, according to the letter, Merz and Macron wish to discuss the new ‘kill switch’ as early as the European Council meeting on 15 and 16 October.