EU Plans to Develop Tool to Restrict Access to Single Market to Counter Trade Tensions

Brussels, Oct 16 (KUNA) -- European Commission President Ursula von der Leyen announced on Friday that the European Union intends to develop a new tool enabling swift and decisive actions to restrict access to its single market, thereby safeguarding EU interests amid growing trade imbalances with China and the risk of escalating tensions. Speaking at a joint press conference with European Council President António Costa following an EU summit in Brussels, von der Leyen said European leaders agreed on the urgent need to address trade imbalances with China, noting that the EU’s trade deficit with Beijing reached approximately 1 billion euros (about 1.123 billion US dollars) per day in 2025, with projections indicating further increases in 2026. She emphasized that while the EU regards China as a key trading partner, it seeks a fair and balanced trade relationship requiring fundamental and rapid rebalancing. The EU’s approach will follow three tracks: dialogue, utilization of existing trade instruments, and development of new mechanisms to address structural imbalances and reduce reliance on a single supplier. The Commission President added that consultations in Beijing yielded preliminary results, including China’s first-ever agreement to regulate exports of hybrid vehicles, improved market access for European industrial, agricultural, and food products, and enhanced predictability of export control measures, particularly concerning rare earth elements and magnets. She stressed that progress in the electric and hybrid vehicle sectors alone is insufficient to address critical structural imbalances, calling for the use of existing tools and stronger safeguards to protect European industries. Von der Leyen noted that the Commission will present the “EU Diversification” initiative next December to accelerate companies’ efforts to diversify supply sources and reduce risks associated with dependence on specific countries, alongside proposing a solidarity mechanism outlining possible measures if any member state faces coercion or retaliatory actions. She further stated that the Commission, building on a French-German proposal, will develop a new tool to restrict access to the single market when EU interests so demand, without replacing existing mechanisms, reiterating that EU unity remains essential in addressing economic challenges. (End) A.R.N. / H.M.F.