EU-China trade conflict escalates with talk of tariffs, quotas, and retaliation

Trade tensions between the European Union and China are escalating as the EU considers systematically expanding trade barriers, including tariffs and import quotas, against Chinese goods. China has vehemently denounced these potential measures as protectionist and vowed to retaliate if necessary.

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Europe's chemical, metal, and clean technology industries are at risk of being destroyed by China's unfair competition.

Stéphane Séjourné, the EU's Commissioner for Internal Market, stated in interviews with European media that Chinese imports pose an "existential crisis" for some European industries. He indicated the EU would more broadly and systematically use safeguard measures, such as import quotas and tariffs, targeting entire industrial sectors rather than specific companies or raw materials. Séjourné highlighted that the EU's daily trade deficit with China reaches €1 billion (approximately $1.08 billion), and China's overproduction threatens 29 million jobs. However, he clarified the EU's goal is not decoupling but achieving a "true rebalancing" through effective measures.

European Parliament has already approved raising tariffs on imported steel from China and other countries to 50%, effective July 1. The European Commission is scheduled to discuss these and other tougher trade policies against China on June 29. China's Ministry of Commerce spokesperson, He Yadong, criticized the EU's steel tariffs as "inherently protectionist," warning they would severely impact China-EU steel trade and global supply chain stability. He asserted that China would resolutely defend its legitimate rights and interests with corresponding measures if the EU discriminates against Chinese companies and products.

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If the EU treats Chinese companies and products discriminatorily, China will resolutely defend its legitimate rights and interests with corresponding measures.

Chinese state media have suggested stronger countermeasures, with a CCTV-affiliated social media account citing sources that China might launch anti-discrimination and industrial/supply chain security investigations in response. The EU's pressure extends to e-commerce and investment. The EU fined the Chinese e-commerce platform Temu €200 million (approximately $216 million) for selling products that failed to meet safety standards. Additionally, the EU has halted the planned acquisition of German electronics distributor Securify by Chinese logistics and e-commerce firm JD.com, citing concerns over market distortion due to foreign subsidies under its Foreign Subsidies Regulation (FSR).

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If the EU stubbornly pursues the 'tool of overproduction,' China will immediately launch comprehensive counter-measures.