EU to strengthen its common market amid US trade conflicts

On Wednesday, the European Commission set out a new strategy to strengthen the European Union’s common market, a move meant to protect the bloc from mounting trade pressure and fresh tariffs threatened by the United States. 

The strategy aims to improve cooperation between member states and remove barriers in areas such as finance, energy, and telecommunications. It also plans to assist small—and medium-sized businesses in growth and digitalization while reducing investment barriers.

Created over three decades ago, the EU’s single market links 26 million companies with 450 million consumers and generates about €18 trillion ($20.4 trillion) in yearly output. Yet officials say lingering rules and costs still hold back trade and investment inside the bloc. 

“The current global context calls for the political will to tackle remaining barriers once and for all. It is time to make the European market work, it is time to choose Europe,” the Commission wrote in its strategy paper.

At the heart of the proposal is a promise to strip away around €400 million in administrative costs every year.

Brussels wants local companies to “buy European”

Brussels also wants to speed up work on shared standards for energy grids, 5G networks, and financial services so that companies can scale across borders with less delay.

Trump’s administration has already imposed duties on steel, aluminium, and a range of other products. Those steps, combined with concern about American dominance in advanced technology, have fed calls in Europe for greater economic self-reliance.

Stéphane Séjourné, the Commission’s executive vice-president for industry and the internal market, presented the plan on Wednesday. One key measure is a change to public procurement rules that would let national and local authorities “buy European” and shut out non-EU bidders on strategic contracts. 

Séjourné referred to the idea as a “Buy European Act” and said it would balance openness with realism. “There is a will to remain a continent that is exporting internationally and at the same time to be lucid and less naive about strategic sectors,” Séjourné said.

If EU governments back the proposal next year, they could refuse offers from overseas companies for public-sector projects ranging from road building to digital infrastructure. Today’s EU and World Trade Organization rules forbid favouring local suppliers, so the shift would mark a major break with the bloc’s free-trade stance. 

Supporters argue that excluding lower-priced rivals from China and elsewhere will safeguard key industries. Critics warn that other countries could retaliate by filing cases at the WTO.

Séjourné, a former French foreign minister and close ally of President Emmanuel Macron, has long pressed for Europe to be more autonomous. He described the procurement change as a “first step,” adding that officials will later examine private-sector transactions “with arguments around safety and economic security” to decide where extra safeguards may be needed.

Digital independence is another focal point for EU

European regulators are drafting separate rules for the cloud-computing market, now dominated by US groups Amazon, Microsoft and Google. The new legislation is expected to include “buy European” elements similar to those in Wednesday’s package. 

Séjourné did not list target industries but signalled urgency wherever the bloc relies on a single foreign source. “In tech, we’re very, very dependent on the Americans. In raw materials, we’re 100 per cent dependent on the Chinese. These are sectors, in the current geopolitical context, we don’t want future generations blaming us for not having acted,” he said.

Despite the challenges, Séjourné sees openings. The EU economy has struggled since the COVID-19 pandemic and the energy shock that followed Russia’s 2022 full-scale invasion of Ukraine. Companies complain that stringent climate rules raise costs, cheap Chinese imports undercut prices, and US tariffs squeeze margins. 

Yet Séjourné argued that Europe is in an “almost ideal” position because “the Americans remain our partners and the Chinese want to strengthen the partnership.” With careful negotiation, Séjourné believes the bloc can “make progress on many big difficulties with the Chinese in many sectors.”

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