Pekin warns EU of firm response as trade tensions escalate

China has warned that it will respond firmly if the European Union imposes new restrictions targeting Chinese companies or products, as Beijing and Brussels approach high-level trade talks aimed at addressing their increasingly strained economic relationship.

China’s Ministry of Commerce issued the warning on September 29 in response to reports that some EU member states were pushing for the development of a European trade instrument similar to the United States’ Section 301 mechanism.

The ministry described the proposed measures as protectionist and unilateral, arguing that they would disrupt China-EU trade as well as global industrial and supply chains.

Beijing warned that introducing additional restrictions while the two sides are engaged in trade and investment negotiations would “seriously undermine mutual trust” and interfere with the overall negotiating process.

China urged the EU to continue addressing disagreements through dialogue.

If Brussels proceeds with what Beijing considers discriminatory restrictions against Chinese companies or products, China “will respond resolutely” to defend the legitimate interests of its industries, the ministry said.

The warning comes ahead of EU Trade Commissioner Maroš Šef?ovi?’s planned visit to Beijing on October 8-9, when he is expected to hold high-level talks aimed at producing concrete progress in efforts to rebalance EU-China trade.

Brussels and Beijing have been engaged in intensified trade negotiations since June, with the European Commission seeking tangible results by October.

Šef?ovi? has warned that Beijing must deliver “concrete results” or face the prospect of tougher European measures.

“I’m trying to do it through these negotiations, but they have to bring us very concrete results. Otherwise, of course, there will be a strong political movement to push for, I would say, harsher measures,” Šef?ovi? said in an interview with Euronews earlier in September.

The EU is particularly concerned about its widening trade deficit with China, market access for European companies and the impact of Chinese industrial overcapacity on European manufacturers.

Technical negotiations have intensified ahead of the October deadline, with Brussels reportedly seeking Chinese commitments to limit exports of certain products to the European market. The EU is also seeking assurances concerning access to Chinese rare earths, which are critical to its automotive, green technology and defense industries.

The latest Chinese warning followed reports that Germany and France were working on a joint proposal calling on the European Commission to accelerate development of a new trade-defense instrument.

According to analyst Noah Barkin of Rhodium Group, European officials have discussed a mechanism that could allow Brussels to rapidly restrict Chinese access to the European market.

The proposed mechanism has been compared with Section 301 of US trade law, which allows Washington to investigate foreign trade practices and impose measures, including tariffs, in response to practices it considers unfair.

China’s Commerce Ministry specifically referred to reports of a European “301-type” instrument in its September 29 statement.

Although the Association of Southeast Asian Nations surpassed the EU in 2020 to become China’s largest trading partner in goods, economic ties between China and the European bloc remain extensive.

The European Commission has said that total EU-China trade in goods and services amounts to hundreds of billions of euros annually, while the bloc’s widening goods deficit with China has become one of the central issues driving Brussels’ demands for a rebalancing of the relationship.

The coming talks in Beijing are therefore expected to determine whether the two sides can reach tangible compromises or whether their trade relationship moves toward greater reliance on defensive and retaliatory measures.