China Vows Retaliation Over Proposed EU Trade Tool

The Ministry of Commerce of the People's Republic of China warned the European Union it will respond with a strong policy toolbox if the bloc implements tougher trade restrictions on Chinese companies and products. The warning follows reports that Germany and France are finalizing a joint paper urging the European Commission to fast-track a trade instrument mirroring the United States' Section 301 framework. This proposed tool could potentially grant Brussels the power to cut China off from the European market within 24 hours.

Chinese officials characterized the proposed mechanism as a typical protectionist and unilateral measure that would disrupt global supply chains and violate World Trade Organization rules. Potential Chinese countermeasures include anti-discrimination investigations, probes into foreign subsidies, and security investigations into industrial and supply chains.

The tension comes as both parties prepare for high-level trade talks in Beijing next week. The European Union is seeking to reduce its record trade deficit with China by October. EU Trade Commissioner Maroš Šefčovič has stated that Beijing must deliver results or face harsher measures, while European Commission President Ursula von der Leyen has pledged to use available tools to rebalance the trade relationship. China maintains it remains open to dialogue through existing consultation mechanisms but asserts that the proposed tool would seriously undermine mutual trust.