Weekly Highlights (Sept. 26–Oct. 2)

Is the EU’s version of ‘Section 301’ looming large? Internal EU divisions have already surfaced. A political spectacle—‘do not impose on others what you do not wish for yourself.’ On September 29, 2026, the Ministry of Commerce spokesperson issued a stern response regarding efforts by certain EU member states to push forward an EU version of the ‘Section 301’ tool. The spokesperson explicitly stated that this instrument constitutes a ‘typical protectionist and unilateral measure,’ which not only fails to resolve underlying issues but also backfires on its initiators—and further destabilizes China-EU trade and global production and supply chains. The spokesperson specifically reminded the EU that it, too, had previously been a victim of U.S. Section 301 measures: ‘Do not impose on others what you do not wish for yourself.’ This statement comes against the backdrop of a joint proposal submitted by France, Italy, Spain, the Netherlands, and Lithuania, urging the European Commission to expedite development of a tool modeled on the U.S. Trade Act of 1974’s Section 301—granting Brussels unilateral authority to impose tariffs on Chinese goods and restrict market access, targeting alleged Chinese ‘overcapacity’ and ‘unfair competition.’ Yet this seemingly formidable ‘EU Section 301’ offensive has already fractured deeply among EU member states—even before leaving the conference rooms of Brussels. France charges ahead; Spain defects; Germany stays silent. France is the vanguard of this initiative. President Macron has not only openly advocated emulating the U.S. Section 301 clause but has also repeatedly labeled China a ‘growing and increasingly fierce competitor’ in multiple forums. France’s motivation for leading the charge extends well beyond industrial anxiety.

This week, attention turns to Europe.

The U.S. data release season—featuring major economic indicators—has now concluded for this month; this week’s focus shifts to Europe. First up is the European Central Bank’s (ECB) monetary policy meeting this Thursday. During the National Day holiday period, ECB President Christine Lagarde and other officials hinted that the October meeting could deliver the ECB’s third interest-rate cut. Markets have readily embraced this view: current pricing fully reflects two 25-basis-point cuts before year-end—roughly aligned with market expectations for the Federal Reserve. A 25-bp cut in October would be a relatively reasonable decision for the euro area: On one hand, after the conclusion of the August Olympics, both manufacturing and services PMIs in the euro area plunged into worrying weakness, while the CPI turned negative on a month-on-month basis in September—signaling accelerating downward pressure. On the other hand, the Fed’s 50-bp cut in September has further widened the scope for rate cuts among other G10 central banks. To date, the euro area’s pace of easing matches that of the U.S.—a positive signal for the euro. However, since a 25-bp October cut is already fully priced in, the more critical focus of this meeting may lie in updated economic forecasts and forward guidance on the future path of rate cuts. Should the tone remain dovish, it could continue to dampen the euro’s rebound momentum. Having covered the euro, let’s turn to the British pound. Following the Labour Party’s landslide victory, the UK’s fundamental economic recovery has remained robust—a point we’ve highlighted repeatedly in analyses such as ‘The Pound Is Worth the Wait.’ Moreover, both the UK and the U.S. currently hold the highest policy interest rates among G10 nations; the absence of a UK-U.S. interest-rate differential itself supports the pound. After rate cuts in August and September, the UK’s unemployment rate and CPI data for September—released this week—will likely reveal how effective those cuts have been. If CPI continues to stabilize and unemployment does not rise further, the pound may continue to draw support from solid fundamentals.

Europe Top Stories: Weekly Summary

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ICIS Europe's weekly roundup covers rising polyethylene margins, Evonik rejecting BASF's €10.3 billion takeover bid, and logistical disruptions from low Rhine water levels affecting chemical trade.

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Europe Top Stories: Weekly Summary