China Warns EU of Retaliation as Trade Tensions Rise Ahead of Beijing Talks

China’s Ministry of Commerce said reported plans for an EU trade mechanism modeled on the U.S. Section 301 framework could damage trust and disrupt ongoing negotiations. Beijing characterized such measures as protectionist and unilateral, and said it would defend the interests of Chinese industries if restrictions targeting Chinese companies or products were introduced.

The warning comes as China and the EU continue negotiations covering trade and investment balances, market access, export controls and other economic issues. European Commission officials have said technical discussions have continued ahead of a second high-level meeting scheduled for Oct. 8-9 in China. Brussels has emphasized that it wants the meeting to deliver tangible progress.

Trade imbalances remain a major source of friction. The EU has been pressing Beijing for greater access to the Chinese market while also examining ways to reduce vulnerabilities created by concentrated supply chains. China, meanwhile, has criticized a range of European measures that it says make it more difficult for Chinese businesses to operate and invest in the bloc.

Europe has already expanded parts of its economic-security toolkit. The EU strengthened its foreign-investment screening framework in June and has continued using trade-defense instruments, including targeted restrictions affecting Chinese participation in public procurement. The European Commission has said such policies are intended to address security risks and unfair trade practices while preserving the bloc’s openness to international investment.

Beijing has demonstrated that it is also prepared to use trade restrictions in disputes with Europe. In July, China placed 14 EU entities on an export-control list covering dual-use items. The latest warning therefore adds to concerns that tougher European measures could be met with additional Chinese countermeasures.

Despite the increasingly firm rhetoric, both sides are continuing negotiations. The EU has identified Chinese exports, European access to the Chinese market and rare-earth export controls among the issues under discussion, while Beijing has urged Brussels to resolve differences through dialogue.

The upcoming talks will provide an important test of whether the two sides can produce concrete compromises before trade tensions intensify further. The EU is seeking measurable progress on long-running economic concerns, while China is signaling that additional restrictions could trigger a response. For businesses on both sides, the outcome could shape market access, investment conditions and supply-chain planning across one of the world’s largest trading relationships.