China has warned that it will respond if the European Union introduces new trade restrictions targeting Chinese companies or products, as France and Germany push for stronger European instruments to address what they regard as unfair commercial practices.

China’s Ministry of Commerce issued the warning after reports that several EU governments were discussing a mechanism modelled partly on Section 301 of US trade law, which allows Washington to investigate foreign trade practices and impose countermeasures.

Beijing described such an approach as protectionist and unilateral and warned that it could damage continuing negotiations between China and the EU.

“If the European side insists on introducing discriminatory restrictive measures against Chinese companies or products,” the ministry said, China would “resolutely respond” to defend the interests of its industries.

The warning comes as Europe’s trade relationship with China is moving further up the political agenda.

According to the European Commission’s latest EU-China trade figures, EU exports to China were worth €199.5 billion in 2025 while imports reached €559.5 billion.

The goods deficit stood at €359.9 billion, compared with €312.2 billion in 2024.

China remained the EU’s largest source of goods imports and its fourth-largest export market.

Brussels argues that the scale of the imbalance is connected not only to competitiveness but also to state support, market-access restrictions and other structural differences between the two economies.

China disputes that assessment and has repeatedly accused the EU of using industrial and security arguments to justify protectionism.

The argument is already visible in several industries.

The EU imposed countervailing duties on Chinese battery electric vehicles after an investigation concluded that state subsidies were giving Chinese manufacturers an unfair advantage in the European market.

Brussels has subsequently widened its attention to other parts of the automotive industry. Earlier this month, EU Today reported that the EU was considering restrictions affecting Chinese hybrid cars as policymakers looked for ways to contain the growing trade imbalance.

The automotive dispute is important because Europe is simultaneously trying to attract Chinese manufacturing investment.

France and Spain addressed that question during President Emmanuel Macron’s state visit to Madrid.

Macron and Spanish Prime Minister Pedro Sánchez agreed on the need for greater European unity in responding to Chinese competition. They also discussed whether Chinese investors entering strategically important European industries should be required to provide stronger commitments on issues such as technology transfer.

Macron said that companies on both sides of the Pyrenees needed protection when they faced unfair competition and argued that “the only response that works is European.”

France has generally favoured stronger European trade defences.

Germany has traditionally approached the issue more cautiously because major German manufacturers have substantial commercial exposure to China. Increasing competition from Chinese producers, particularly in industrial sectors where German companies were once dominant, has altered the debate.

Reports that Berlin and Paris are now working together on a stronger trade instrument therefore suggest a potentially important shift.

The two countries are said to be considering a European mechanism inspired by the American Section 301 process, although no final proposal has yet been adopted by the European Commission.

EU trade law already provides several instruments.

Brussels can impose anti-dumping or anti-subsidy duties following investigations, use the Foreign Subsidies Regulation to examine state-backed investment and procurement, and deploy the Anti-Coercion Instrument where another country uses economic pressure against the EU or a member state.

The discussion now concerns whether those instruments are sufficient when governments believe a problem extends across industries rather than affecting an individual product.

The debate comes only weeks after EU Today reported that Brussels was preparing additional pressure on Chinese hybrid-car imports, demonstrating how quickly EU-China trade disputes are expanding beyond the original electric-vehicle case.

At the same time, Brussels and Beijing have established a Trade and Investment Consultations mechanism, with workstreams covering trade balances, export controls, intellectual property and World Trade Organisation reform.

China’s Commerce Ministry has warned that introducing tougher measures while those talks continue would damage trust.

That leaves the EU facing two parallel choices: continue negotiations intended to narrow the trade dispute while also developing stronger instruments in case those negotiations fail.

France and Germany are increasingly arguing that Europe needs greater leverage.

Beijing’s response is that using that leverage against Chinese companies would bring countermeasures.

The next stage will depend on whether the Franco-German proposal develops into a formal EU initiative. If it does, the dispute will move beyond duties on particular products towards a broader argument over how Europe intends to manage its economic relationship with China.

The European Union is embarking on diplomatic hand-to-hand combat with China in an effort to rework its trade with Beijing and show it is not a geopolitical weakling. Using unusually direct terms, the EU has given China a mid-October deadline to provide ways it will reduce its massive trade advantage over Europe. If not, the […]

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