China Warns EU Against Trade Restrictions Ahead of Beijing Talks
Quick Look
- China's commerce ministry warned the EU it will 'respond firmly' if the bloc introduces restrictions on Chinese businesses or products, stating such actions would 'seriously undermine mutual trust' and disrupt ongoing trade talks.
- The warning comes as EU officials consider '301'-style tools to cut China off from the European market within 24 hours, amid efforts to reduce the EU's record trade deficit with China by October.
AI-generated summary
Why It Matters
China and the EU have been engaged in trade talks this summer as Europe seeks to reduce its record trade deficit with China by October. The EU's trade deficit with China is the largest in the world, recently surpassing the U.S., according to China Customs data.
BEIJING — China's commerce ministry has sent a strong warning to the European Union ahead of expected high-level talks in Beijing next week.
China will "respond firmly" if the EU introduces restrictions on Chinese businesses or products, the Chinese commerce ministry said in a statement late Tuesday, according to a CNBC translation of Mandarin.
The ministry said such actions, while China and the EU are engaged in trade talks, would "seriously undermine mutual trust" and "disrupt" the negotiations.
China and the EU have been engaged in trade talks this summer as Europe wants to reduce its record trade deficit with China by October. EU Trade Commissioner Maroš Šefčovič had warned in an interview with Euronews this week that Beijing must deliver "concrete results" by October or face "harsher measures." He is expected to visit Beijing next week.
Earlier this week, Rhodium Group's Noah Barkin said Europe was considering measures to shut China out of the bloc.
Citing European officials, he said Germany and France are finalizing a joint paper that calls on the European Commission to speed up development of a tool that one official described as allowing Brussels "to cut China off from the European market within 24 hours."
Barkin said the measures could mirror the U.S. Section 301 tariff approach. China's commerce ministry statement said it was responding to Europe's consideration of "301"-style tools.
While the Association of Southeast Asian Nations surpassed the EU in 2020 to become China's biggest goods trading partner, the EU's trade deficit with China is the largest in the world, recently surpassing the U.S. That's according to China Customs data accessed through Wind Information.
When including services, the EU said it was China's top trading partner, with combined trade of 880 billion euros, or nearly $1 trillion, last year.
What to Watch
AI outlook — possibilities, not facts
The EU will proceed with developing a tool to restrict Chinese market access within 24 hours if trade talks fail to yield concrete results by October.
Likely · Within months
China will implement retaliatory measures if the EU introduces restrictions on Chinese businesses or products during ongoing trade talks.
Very likely · Within weeks
Open Questions
- What specific restrictions is the EU considering on Chinese businesses or products?
- What concrete results does the EU expect from China by October?
- When exactly will the high-level talks in Beijing take place next week?
