When the single market cannot decide

Posted on: 3 April 2026

There is a scene that repeats itself in Brussels with a regularity that would be comic if the stakes were not quite so high. A commissioner presents an urgent trade proposal to the ambassadors of the twenty-seven member states. Before the meeting ends, national communications teams are already issuing corrections, qualifications and contradictions. This is not malfunction. It is the system working precisely as designed.

Last week something happened that deserves more attention than it received. Friedrich Merz, the German chancellor, proposed opening direct trade negotiations between the European Union and China. The Commission rejected the idea almost immediately, calling on Beijing to address its distortive practices before any such conversation could begin. Two officially European positions, diametrically opposed, issued within days of each other. Meanwhile Macron was pushing for tougher tariffs against China, the German trade minister was pushing back, and Chinese exports to Europe were rising 14.8 per cent while those to the United States fell 28.6 per cent.

This is not a passing political disagreement. It is the structure revealing itself.

Germany built its industrial model on exports to China. Volkswagen, BMW, BASF: companies that have spent decades and billions of euros embedding themselves in Chinese supply chains, joint ventures and institutional relationships. Imposing heavy tariffs on Chinese imports means risking retaliation on that market. The calculation is rational and specific, not ideological. France has a manufacturing base more directly exposed to Chinese competition, less presence in China, and therefore opposite incentives: protecting the domestic market costs less than preserving access abroad.

Two countries, two structurally incompatible sets of interests, one trade policy that by treaty must be unified. The mechanism produces paralysis not because governments are short-sighted but because any real decision advantages some members enough to justify the implicit veto of others.

July 2025 illustrated this with unusual clarity. Von der Leyen signed a trade agreement with the United States at Turnberry. Fifteen per cent tariffs on European exports to the US, concessions on cars and machinery, nothing on sensitive agricultural goods. Within twenty-four hours, France and Germany were publicly repudiating it. The Commission president had signed an international agreement without the genuine backing of her principal shareholders. This is not a paradox; it is the structure of the mandate. The Commission holds exclusive competence on trade policy, but that competence lives or dies on member state consent, and the consent was not there.

The practical result is that Europe responds to American tariffs and Chinese import surges like a boxer whose arms are held by two separate ropes, one on each side. Every punch attempted is arrested by the other rope. Brussels has spent years building theoretically powerful instruments: the anti-coercion regulation, designed in 2023 with China and Lithuania in mind, never used; counter-measures worth ninety-three billion euros against the United States, suspended before they came into force. They exist on paper. They do not exist in practice because deploying them requires a consensus that the architecture of national incentives makes systematically unachievable.

I have seen this pattern before in different contexts, with different actors and lower stakes. When an institutional structure requires near-unanimity to act, it does not produce mediated decisions. It produces paralysis with the appearance of motion. Working groups, joint declarations, road maps, impact assessments. Everything except choices. Because choices distribute costs unevenly, and whoever bears the greater cost will always find a mechanism to delay or hollow out the decision before it becomes operational.

China understands this well. Beijing has spent years cultivating bilateral relationships with individual member states alongside its formal dealings with Brussels, knowing that the former reliably condition the latter. When the Commission attempts a coordinated response, it finds a landscape of national interests that have already been shaped separately. The same logic applies to Washington, though with considerably less patience and rather more noise. Trump did not negotiate with Europe as an entity. He negotiated with Von der Leyen while holding in reserve the knowledge that behind her stood twenty-seven governments with twenty-seven different calculations, and that asymmetry was his principal advantage.

The problem is not the absence of instruments. It is that the available instruments require a degree of internal cohesion that the incentive structure does not generate. Whether this is a flaw in the European project or a feature of it is a question worth sitting with. A union capable of acting with the speed and compactness of a nation state would have already resolved the question of sovereignty, and that question is nowhere near resolved. What exists is something intermediate: integrated enough that individual responses are no longer possible, not unified enough that collective responses are reliably achievable.

In the meantime, Chinese porcelain enters at seventy-nine per cent tariffs, candles at fifty-six, electric vehicles at variable rates, steel under emergency measures. Product by product, category by category, always behind the curve. While Washington demands access to European digital markets as the price of reducing steel tariffs. And Berlin and Paris remain structurally incapable of agreeing on almost anything that matters.

The single market is the most valuable thing Europe has built. Four hundred and fifty million consumers, the largest trading bloc on the planet. The difficulty is that when that market is required to express a unified strategic will, it discovers it does not have one. Not for want of political will in individual capitals, but because the political wills of individual capitals point in structurally different directions. The supranational institutions hold the mandate without the power, and the power without the mandate.

Britain left partly because of this. The irony is that watching from outside does not make the view any clearer.