France and Germany proposed a last-resort trade instrument that could cut off China's access to the European Union single market in response to coercive measures

Overview Debates Related claims Topics Sources

The European Commission proposed reserving part of the two gigahertz frequency band, which allows smartphones to connect directly to satellites, for European companies, limiting available spectrum for U.S. and Chinese operators.

The European Commission stated that its frequency proposal incentivizes market entry and supplier diversification for EU companies while remaining open to operators from outside the EU.

U.S. Ambassador to the EU Andrew Puzder warned that European companies could face devastating retaliatory measures from Washington if Brussels restricts American competitors like SpaceX from parts of the European market.

U.S. Ambassador Andrew Puzder questioned whether the EU's enforcement of the Digital Markets Act is intended to improve competition or to generate revenue from American tech companies through fines to benefit the European budget.

SpaceX criticized the European Commission's proposed frequency changes, warning that limiting its spectrum allocation could lead to deteriorating communications in Ukraine.

Chinese President Xi Jinping is seeking to balance support for Russia with economic ties to Europe, where a trilateral summit could spark backlash.

The European Union runs a trade deficit with China of more than $1.1 billion a day, with Chinese exports to the EU rising 16% over the first nine months of 2026.

This month, the European Union and China reached an agreement to cap Chinese hybrid vehicle imports into the EU at 350,000 annually.

Under the draft Franco-German deal, the UK must align with EU trade protection measures, including tariffs on Chinese electric vehicles, to qualify for Made in Europe status.

France and Germany reached a provisional deal on October 15, 2026, to soften EU car emissions targets and allow the UK to join the Made in Europe scheme.

The Franco-German agreement restricts the Made in Europe status for cars to the 27 EU member states, while allowing opt-in conditions for Britain and Norway.

European carmakers requested Britain's inclusion in Made in Europe public procurement rules because of deeply integrated cross-border supply chains.

The UK imposes a 10% import duty on Chinese electric vehicles, whereas the European Union has imposed tariffs up to 45% since 2024.

The European Union's trade deficit with China exceeds $1 billion a day, heightening economic anxiety over potential job losses in European industrial sectors.

In October 2026, China's Ministry of Commerce urged France and Germany to refrain from encouraging the European Union to resort to protectionist measures.

European Commission trade envoy Maroš Šefčovič traveled to Beijing on October 8, 2026, for two days of negotiations with Chinese Commerce Minister Wang Wentao to address the trade deficit.

Trade protectionism is an effective way to build European industrial competitiveness

Decoupling the European economy from China is impossible

The European Parliament voted 454 to 86 on October 7, 2026, on a resolution calling for economic reciprocity and a proportionate European Union response if China does not open its markets.

The European Union aims to emulate Japan, which reduced its rare earths dependency on China from 90% to 60% after Beijing restricted exports of approximately 20 materials to Japan in 2011.