Diplomats from the EU’s 27 member states were pressured this week to lift sanctions on Yusha Group, a Chinese textiles manufacturer accused of selling sensitive European technology to Russian buyers. In exchange, Beijing has pledged that the company will refrain from shipping banned items to Russian military-linked buyers. It will also remove German company Sindlhauser Materials from its own export controls list, according to multiple sources familiar with the affair. The unusual quid pro quo –...

Less than two weeks after Brussels and Beijing struck a surprise deal to avert an escalating trade dispute, their fragile rapprochement has descended into a battle over who blinked first. In Brussels and Berlin, officials are emboldened by what they consider proof that collective EU pressure can force Chinese concessions. Rather than resting on their laurels, they are cooking up a fresh batch of trade restrictions. Beijing, on the other hand, has bristled at the idea that it can be strong-armed...