China has warned the European Union that it will take a “resolute response” to protect Chinese industries if Brussels moves ahead with new restrictions on Chinese companies or products, raising the risk of another escalation in trade tensions between the two economies.
China’s Ministry of Commerce said the reported EU initiative amounted to a “typical protectionist and unilateralist measure” that could disrupt the stability of China-EU trade and broader industrial supply chains.
The warning came after reports that several EU member states are preparing a joint document calling on the European Commission to accelerate the development of a new instrument for responding to what the bloc considers unfair trade practices, particularly those involving China.
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The reported proposal would give the EU a mechanism resembling the United States’ Section 301 trade authority, which Washington uses to investigate foreign trade practices and impose measures in response to what it determines to be unfair conduct.
Rhodium Group senior adviser Noah Barkin reported that France and Germany are finalizing a joint paper calling for Brussels to fast-track such an instrument. According to Barkin, the document is intended to give the European Commission greater powers to restrict China’s access to the European market.
Beijing’s response indicates that the proposal is being viewed not simply as another European trade-defense measure but as a potential expansion of the EU’s ability to impose restrictions on Chinese companies.
“If the European side engages in talks and consultations with China, while increasingly pressuring China, it will seriously undermine mutual trust, interfere with the overall process of consultation,” China’s Commerce Ministry said.
The ministry said China would defend the legitimate interests of its industries if the EU introduced discriminatory measures.
The timing of the warning is significant because Beijing and Brussels have been attempting to stabilize their trade relationship through a new consultation process.
China and the EU held their first Trade and Investment Consultations in Brussels in June, agreeing to work on four areas: trade and investment balancing, export controls, intellectual property rights and reform of the World Trade Organization. The two sides also agreed to hold another ministerial-level meeting in autumn.
Chinese officials subsequently said that more than 20 consultations had been held by the respective working teams as they sought to address trade concerns. Beijing has repeatedly called for negotiations based on what it describes as mutual respect and balanced treatment.
The reported Franco-German initiative introduces a harder-edged element into those discussions. Rather than relying only on existing WTO procedures and individual trade-defense investigations, the proposed mechanism could give Brussels a broader instrument for responding to foreign trade practices.
For China, the concern is that such a framework could eventually be applied across multiple industries and become a permanent part of the EU’s trade policy toward Chinese companies.
Beijing has already signaled that it has options for responding. State-backed Global Times reported that China’s potential “strong policy toolbox” could include anti-discrimination investigations, security probes into industrial and supply chains, and scrutiny of the effects of foreign subsidies. The newspaper cited an unnamed Chinese observer for the possible measures.
That means a European trade measure could generate pressure beyond tariffs. Investigations into European companies operating in China, supply chains and foreign subsidies could create additional costs for businesses on both sides.
The dispute comes as European governments increasingly grapple with the scale of China’s industrial capacity and the competitive pressure Chinese companies are creating in sectors ranging from electric vehicles and renewable energy to chemicals, telecommunications and other advanced manufacturing industries.
Germany’s powerful industrial sector has itself been debating how aggressively Europe should respond. The German Federation of Industries recently called for stronger tools against unfair competition and greater supply-chain diversification, while cautioning against broad protectionism.
The European debate is not just about restricting Chinese imports, as it also concerns whether existing EU trade instruments are sufficient to address state subsidies, excess industrial capacity and the growing presence of Chinese companies in European markets.
That creates a difficult balance for Brussels. European governments want to protect domestic industries and reduce vulnerabilities while maintaining access to Chinese markets and avoiding a broad trade confrontation.
The same tension is visible in telecommunications. The EU is considering giving operators more time to remove equipment from high-risk suppliers such as Huawei after companies warned that replacing the equipment could cost as much as €40 billion. The issue illustrates the economic cost that can accompany efforts to reduce dependence on Chinese technology.
The stakes are equally substantial for China. The EU remains an important trading partner, while Chinese manufacturers now depend on overseas markets as domestic competition intensifies in several industries.
A widening cycle of trade restrictions and retaliation could therefore hit companies on both sides at a time when Beijing and Brussels are formally trying to rebalance their relationship through negotiations.
The immediate issue is still only a reported policy proposal rather than an EU-wide restriction already in force. The Franco-German paper is expected to call for the Commission to develop the instrument, after which member states and EU institutions would still have to determine its scope and implementation. Barkin described the proposal as potentially significant because it would signal a stronger common position from Europe’s two largest economies toward Beijing.
China’s warning nevertheless shows that Beijing is already treating the proposed mechanism as a potential escalation.
The central risk for European and Chinese businesses is that a tool originally designed to strengthen Europe’s negotiating position could become the foundation for a broader cycle of reciprocal investigations and market restrictions. With formal China-EU consultations still underway, the dispute now adds another test of whether both sides can pursue tougher trade policies without allowing their economic relationship to slide into a wider confrontation.