You're saying that like the two are at odds. France is a military superpower with almost entirely France, worst case scenario western EU, based supply chain. Italy, Spain, to a lesser extent Germany are too. Manufacturing is also pretty strong across (most) of the EU. Automotive is struggling in Germany, but booming in France (Renault are killing it). Leading in Aeronautics too. It's just mostly high value manufacturing. In the EU, 25% of the economy is in manufacturing. Compare with 10% in the US.
And those regulations are, more often than not, for everyone's benefit - at least EU, but often the Brussels effect applies so a lot of the rest of the world benefits too.
What you are saying is just not true. Frances car industry is dying. Renault is a small company, not even in the top 10 and Stellantis is doing extremely poorly, also affecting Italy's car industry. Within a decade or so COMAC will have a competitive passenger plane, seriously threatening Airbus market share.
Germany's entire industry is currently dying since it is impossible to have a cost competitive manufacturing industry while having some of the highest energy prices in the world.
Your entire comment looks at the current status quo, not at the continuous downward trend or the abyss which awaits if Stellantis or VW Group get pushed out of the market by Chinese competition.
Do you think Germany or France will continue to have a car industry, when China makes cars or the same quality for 70% of the price? Because that is currently the reality.