China warns EU of retaliation as bloc mulls tougher trade curbs

BEIJING – China will take counter measures if the European Union presses ahead with new restrictions on Chinese imports, a Ministry of Commerce official said, as trade tensions between the two blocs continue to rise.

“If a trade surplus is enough to label a country as having ‘overcapacity,’ does the EU have overcapacity in cars, pharmaceuticals, wine and cosmetics?” spokesman He Yadong said at a regular briefing in Beijing on May 21.

He added that Brussels should “return to the right path of dialogue” with Beijing and vowed “resolute countermeasures” if the bloc decides to impose new discriminatory measures against China, without elaborating. 

Bloomberg News reported earlier that EU officials are exploring new measures to protect the bloc’s economy against an influx of Chinese goods, citing people familiar with the matter.

Officials will debate the issue at a meeting on May 29.

The bloc will assess which instruments member states are willing to deploy against overcapacity in China’s manufacturing sector.

EU leaders are expected to take up the issue at their next summit in June.

Trade tensions with the EU are escalating even as China and the US continue talks to extend a truce following a visit by President Donald Trump.

The bloc is growing anxious about a widening trade deficit with the world’s second largest economy, fearing it will threaten manufacturing hubs throughout the region.

European companies operating in China have also warned that new supply chain regulations and other measures are increasing the risks of doing business there.

In March, China criticised the EU’s Industrial Accelerator Act, which favors the bloc’s domestic companies in public procurement, calling it protectionist and damaging to the stability of the global supply chain. BLOOMBERG