French President Emmanuel Macron urged European Union leaders to consider activating the bloc’s most powerful trade mechanism against China if talks fail to resolve Beijing’s proposed export restrictions on critical raw materials. According to people familiar with the discussions, Macron told other heads of state that the EU should be ready to use every tool at its disposal, including the anti-coercion instrument, during a summit in Brussels. The French presidency did not issue a public response to the remarks.
Speaking to reporters after the summit, Macron described China’s new export measures as “economic coercion” and emphasized their potential impact on Europe’s industries. “We can see the impact it is having on us and we need to be able to respond,” he said.
Earlier this month, China announced stricter rules on the export of rare earths and other essential materials. The move would require exporters to obtain licenses if their products contain even trace amounts of Chinese-sourced rare earths. These elements are vital for electric vehicle batteries, renewable energy technology, and defense manufacturing, raising concerns about Europe’s supply security.
German Chancellor Friedrich Merz confirmed that leaders discussed the possible use of the anti-coercion instrument but said no decision had been reached. The responsibility now lies with the European Commission, which manages trade policy for the EU, to assess whether to implement the measure.
The anti-coercion instrument, which has never been put into action, was originally designed as both a deterrent and a response mechanism against nations using trade pressure to influence EU policies. Potential countermeasures under the tool could include tariffs, taxes on technology companies, or restrictions on Chinese investments and access to European public contracts.
The policy emerged from Europe’s effort to strengthen its trade defenses following the tariffs imposed by the US during Donald Trump’s presidency and China’s earlier decision to limit Lithuanian imports after Taiwan opened a trade office in Vilnius.
While the use of such a tool remains unlikely for now, as it could heighten tensions with Beijing, France has previously advocated for it, including during negotiations with Washington. Still, the proposal has yet to gain broad support across the bloc.
Meanwhile, the European Commission is preparing alternative strategies in case diplomatic efforts with China fail. Reports suggest that a list of potential trade measures could be finalized by the end of the month to strengthen the EU’s negotiating stance. The commission is also drafting a plan to secure alternative sources of critical materials and protect short-term supply chains.
EU Trade Commissioner Maros Sefcovic recently held discussions with Chinese Commerce Minister Wang Wentao about the export curbs. After their conversation, Sefcovic told reporters, “We have no interest in escalation. However, this situation casts a shadow over our relationship, therefore a prompt resolution is essential.”
