France and Germany warned against protectionist measures after EU letter

Ahead of high-level trade talks between China and the European Union later this week, Chinese officials and experts have warned France and Germany against resorting to protectionist measures, politicizing economic issues and framing them in terms of security.

The warning came after a letter jointly signed by French President Emmanuel Macron and German Chancellor Friedrich Merz, urged European Commission President Ursula von der Leyen to bolster the EU with a new trade diversification instrument and a new trade defense measure.

Reuters reported on Monday that the letter, together with an unofficial proposal paper, had been welcomed by the commission, which said it was a valuable contribution to the debate on geoeconomic risks and global imbalances, and aligned with Von der Leyen's stance on competitiveness and her approach to EU trading partners.

Though the letter did not mention China, analysts said China was the most likely focus of the proposal as it was sent out before possible China-EU trade talks on Thursday.

A spokesperson for China's Ministry of Commerce said on Tuesday that the ministry had taken note of the report and expressed hope that France and Germany, as major global economies, would uphold openness, cooperation and free trade, abide by World Trade Organization rules, and refrain from encouraging the EU to resort to protectionist measures at every turn. Still less should they politicize economic and trade issues under the garb of security concerns.

"They should avoid taking the wrong approach down the wrong path, which could ultimately backfire on themselves," the spokesperson said.

The China Chamber of Commerce to the EU also issued a response opposing the reported proposal in its current form and calling for continued dialogue, consultation and a balanced approach to addressing trade concerns.

"At a particularly critical stage of the ongoing China-EU trade negotiations, we believe that introducing such a mechanism could increase uncertainty, undermine mutual trust and complicate efforts to achieve constructive and tangible outcomes," said a spokesperson for the CCCEU.

In June, China and the EU held the first round of trade talks and established four workstreams covering trade and investment balancing, export controls, intellectual property rights and WTO reform.

The progress came against the backdrop of deep economic ties between the two sides, with bilateral trade exceeding $828 billion in 2025.

Michael Schumann, chairman of the board of the Federal Association for Economic Development and Foreign Trade of Germany, said German businesses are increasingly concerned about the political uncertainty surrounding the economic relationship between the two sides and expect a credible political signal that the EU and China want to manage their differences rather than escalate them.

"Companies need predictability," said Schumann. They want fair competition and better market access, and want to preserve the enormous opportunities that continue to exist in China, he added.

"At the same time, Europe should avoid creating the impression that new economic instruments are an end in themselves. Strong instruments can have a role as a safeguard and as leverage in negotiations, but the objective must always be to create better and more balanced conditions for trade."

He said the logic that every dispute must be answered with another restriction should be avoided. "Once retaliation becomes the dominant dynamic, businesses and consumers on both sides lose."

Schumann regarded the talk of a "kill switch" in the current debate and reporting surrounding the Franco-German paper as irresponsible rhetoric.

"I have said repeatedly that language matters in international relations. Words can open doors, but they can also close them. Europe should defend its legitimate economic interests firmly, but we should not talk ourselves into a confrontation that neither side can benefit from," he added.

Mark Logan, a London-based political risk consultant and former member of the British Parliament, said Europe should pay close attention to signs of greater engagement displayed at the recent China-United States summit and pursue more cooperation with China rather than engage in protectionist measures.

"European leaders must find a way to work with China and the new emerging centers of economic power by learning the most important ingredients for their success: technological innovation and entrepreneurialism," said Logan.