The EU plans to launch the "European version of 301" tool, and Beijing warns that it will undermine China-EU economic and trade cooperation

(Deutsche Welle Chinese website) Recently, it was reported that EU member states are calling on the European Commission to speed up the development of the European version of the "301" tool and take tougher measures against China. Beijing responded to the rumors on Wednesday (September 30), warning the EU that if Brussels "increases its show of strength against China" while negotiations are ongoing, "this will seriously undermine mutual trust, interfere with the overall process of consultations, and affect the overall situation of China-EU economic and trade cooperation."

A spokesman for the Chinese Ministry of Commerce said that the European version of the "301" tool mentioned in media reports "is a typical protectionist and unilateral measure. It will not only not help solve the problem, but will also backfire on (the EU) itself." China also stated that it will pay close attention to the EU's subsequent developments. "If the EU insists on introducing discriminatory restrictive measures against Chinese companies or products, China will resolutely respond."

"The 'European version of 301' will allow us to exclude China from the European market within 24 hours."

“Section 301” is a part of U.S. trade law that allows the U.S. government to take action when trade practices are clearly “unreasonable, unfair, or discriminatory.”

In recent years, China's low-cost manufacturing, government subsidies and export restrictions have caused the EU to worry about the growing trade imbalance between the two sides. Currently, the EU's trade deficit with China is approximately 1 billion euros per day. Many EU country leaders have asked the European Commission to take practical measures. French President Macron called for the establishment of a "European version of Section 301" in May, saying that Europe's "sovereignty is facing a test."

China's state-run Global Times on Wednesday cited a recent article by Noah Barkin, an analyst on EU-China relations. Ba Jin quoted an EU official in the article as saying that Germany and France are finalizing a joint document urging the European Commission to speed up the development of a mechanism to give Brussels new powers and exclude China from the EU market. "This tool we are calling for will allow us to exclude China from the European market within 24 hours," the official said.

The Global Times report quoted an unnamed "China observer" as saying that if the EU takes protectionist measures against China, China will respond with a "strong policy toolbox". Possible countermeasures include investigating discrimination, supply chain security or the impact of foreign subsidies.

EU-China trade imbalance

Speculations that trade frictions between Europe and China may intensify have been increasing for some time. At the EU summit in June this year, the expanding trade deficit between the EU and China and the EU's dependence on China's key raw materials and China's supply chain were the focus topics. The EU has made it clear on many occasions that the trade imbalance with China is unsustainable. Many media outlets have published articles this year saying that the risk of a trade war between the EU and China has increased.

European Commission President von der Leyen and Germany have called this trade imbalance "China Shock 2.0."

Esther Goreichy, an economist at the Mercator Center for China Studies (Merics) in Berlin, said that "China Shock 2.0" will have a profound impact on the German economy because it will simultaneously impact the two pillars of Germany's traditional growth model - exports and industrial production. "Germany's entire core industrial sector has felt this pressure."

Another new mechanism involving tariffs

A recent report by China.Table, a German media that focuses on China, pointed out that the European Commission in Brussels is brewing new trade policy measures. In addition to the "European version 301" mentioned above, it also includes another new mechanism that may involve allowing the EU to impose tariffs on Chinese products. This mechanism will allow the EU to impose tariffs on Chinese products when Chinese products account for more than 40% of the EU's total imports of specific products. The focus will be on strategic sectors such as semiconductors, critical raw materials and rare earth elements, but industries such as pharmaceuticals, chemicals and automobiles are also mentioned.

According to reports, unlike the anti-coercion mechanism, the European Commission can use this mechanism more easily and only needs the support of a majority of member states.

Chinese economists expect EU-China trade deficit to normalize

Chinese economists have different views on the EU-China trade deficit (or China's trade surplus with the EU), believing that this may continue to expand and become a norm in the future. German media China.Table cited the views of many participating economists at the 2026 Tsinghua PBC Chief Economist Forum, saying that the trade imbalance between Europe and China is mainly due to the improvement of China’s competitiveness.

China.Table's report mentioned that Huang Yiping, dean of the National School of Development at Peking University, said that China's measures to stimulate consumption have not yet achieved the expected results, and increasing overseas investment by Chinese companies is a solution. He also said that by transferring more production abroad, Chinese companies can create local jobs, income and tax revenue, thereby establishing a new framework for international economic cooperation. Liu Yuanchun, president of Shanghai University of Finance and Economics, also emphasized that China's economic model is transforming from investment and export-driven to innovation-driven growth. This transformation will take 15 to 20 years, so trade imbalances will still exist in the short term.

However, the report wrote that Yao Yang, director of the China Center for Economic Research (CCER) and a well-known economist, also reminded that China should pay more attention to the concerns of its trading partners. He also specifically mentioned the plight of the German automobile industry.

As early as the fall of 2024, the EU has begun to impose additional tariffs on electric vehicles made in China. However, a research report released by the European Federation of Transport and Environment this summer showed that tariffs have barely curbed the EU's import of Chinese electric vehicles.

In the middle of this month, EU Trade Commissioner Sefcowicz held consultations with Chinese Commerce Minister Wang Wentao on controversial issues such as China's exports to the EU, EU companies' market access in China, and China's export controls on rare earth elements. The European Commission spokesperson also announced that Sefcovic plans to visit Beijing from October 8th to 9th to co-chair the second meeting of the China-EU Trade and Investment Consultation (TIC).