Union leaders rallied behind a tough new set of powers to counter coercive trade practices and, in extreme cases, cut off its market of 450 million consumers from economic rivals such as China.

European officials are now gaming out Beijing’s playbook for escalation and Europe’s response, according to people familiar with the matter, who spoke on the condition of anonymity. China has always tested EU unity and tried to play member states off each other and EU officials expect them to try again this time.

“The European side cannot fantasize about gaining benefits by exerting pressure, nor should it underestimate China’s determination and capability to protect its own interests,” the Ministry of Commerce said in a Friday statement.

The European push represents the most forceful and confrontational effort yet to reduce the EU’s massive trade deficit with China, which reached €360 billion ($404 billion) last year. But China has made clear that it would retaliate if the EU introduces new trade measures or discriminatory restrictions targeting its companies or products that go beyond previous agreements.

The rhetorical tit-for-tat could be a prelude to how difficult the next few months will be and how carefully the EU has to tread in advancing its economic security agenda while keeping alive a dialog with Beijing. The tensions could come to the fore when the EU’s trade chief, Maros Sefcovic, continues discussions with his Chinese counterparts in January.

China’s dominance of critical rare earth supplies — leverage it’s already wielded in trade negotiations with the US — gives Beijing a powerful deterrent as Europe simultaneously tries to curb Chinese imports and secure the materials its factories need. The EU imports 46% of its rare earths from China and 100% of its heavy rare earths, which are critical for permanent magnets essential for defense systems and electric vehicles.

EU leaders, including German Chancellor Friedrich Merz and French President Emmanuel Macron, met in Brussels this week to debate the new trade measures and they asked the European Commission, which handles trade matters for the EU, to present plans before the end of the year.

The commission has also started evaluating trade data to detect surges in imports, a first step toward placing quotas on additional sectors of goods being shipped from China and other countries, Bloomberg reported earlier.

The EU will likely use the agreement it reached with China on hybrid vehicle imports — which saw the EU announce a cap of 350,000 cars a year — as a blueprint to apply to other sectors. If the commission detects a spike in goods it can use safeguard measures such as quotas to restrict import volumes.

“Leaders clearly supported this,” Commission President Ursula von der Leyen told reporters Friday in Brussels. “Our industries have called for action and we have heard them, and we will respond, including some more safeguards.”The commission is assessing industries including chemicals and machinery as potentially in need of safeguard measures. EU leaders on Thursday proposed several other sectors where they would like to see action taken, including robotics, solar and wind energy and the medical sector.

“We want to create tools to combat overcapacity, high subsidies, and undervalued currencies,” Merz told reporters Friday in Brussels. “And we will have a toolkit for that purpose — the toolkit will become bigger, we will show it and, if necessary, put it to use.”Sefcovic has stressed that the plan is to maintain parallel tracks of talking while the EU takes necessary actions, and he telegraphed clearly that the deal reached with China on hybrid vehicles is only the beginning and more action would be needed to rebalance the relationship.

But the unprecedented level of unity displayed in Brussels this week is giving European officials hope that the political will is going to be there for a prolonged trade fight that’s likely to inflict pain on Europe’s industries in the process.

It was mostly driven by a new consensus emerging in Berlin where Merz’s government had to respond to domestic industry pleas to finally support protective measures. For the first time, even the German automotive industry acknowledged the need for swift action.

The most aggressive tool the EU is developing will be a novel power endowed to the commission, which would allow it to shut off access to its single market in extreme cases where a rival, such as China, was seen as attacking the EU’s economy, Bloomberg reported earlier.

“We will develop a new instrument for decisive action by limiting access to the single market, where this is in the union’s interests, fast and immediately,” von der Leyen said.

The plan is that it would be a so-called second-strike measure, intended to deter rivals from using unfair policies to weaken European companies or from starting a trade war against the EU.

“We have witnessed a very profound change in European trade policy,” Macron said. “A much more pragmatic trade policy that is willing to protect its sectors and economic actors against unfair competition.”