China vows response if EU broadens trade tariffs

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China challenges EU plans

Highlights

China threatened retaliation over broader EU trade curbs.
EU and Chinese trade chiefs meet Oct. 8 and 9.
The EU goods deficit with China reached €359.8 billion in 2025.

Beijing said simultaneous negotiations and additional trade pressure would damage trust and interfere with the consultation process. The warning followed reports that some EU governments want an instrument modeled on the U.S. Section 301 mechanism, according to Bloomberg. China’s Commerce Ministry described that approach as protectionist and said it would defend Chinese companies if discriminatory restrictions were introduced.

October talks face a harder backdrop

EU Trade Commissioner Maroš Šefčovič is scheduled to meet Chinese Commerce Minister Wang Wentao in Beijing on Oct. 8 and 9. The two sides established formal trade and investment consultations in June, with workstreams covering trade and investment balances, export controls, intellectual property, and World Trade Organization reform.

Brussels wants measurable progress by October. Recent discussions have covered Chinese exports to Europe, European companies’ access to the Chinese market, and restrictions on rare-earth exports. EU officials have said the Beijing meeting needs to produce concrete results after months of negotiations.

Europe weighs a broader tariff tool

The proposal under discussion would resemble Section 301 of the U.S. Trade Act of 1974, which gives Washington authority to respond to foreign trade practices judged discriminatory or inconsistent with U.S. trade rights. A comparable European mechanism could give Brussels another route for applying tariffs across sectors.

That would expand a trade dispute already shaped by concerns over market access, industrial subsidies, and European dependence on Chinese suppliers. Beijing argues that new restrictions introduced during negotiations would work against the consultation process rather than resolve those disagreements.

A €360 billion imbalance

The scale of bilateral trade explains why both sides have much at stake. EU imports from China reached €559.4 billion in 2025, while exports totaled €199.6 billion, leaving the bloc with a €359.8 billion goods deficit. China was also the EU’s largest source of imported goods.

The imbalance has persisted into 2026: the EU goods deficit with China reached €103 billion in the second quarter alone, its highest quarterly level since 2022. The October meeting, therefore, arrives with Brussels seeking changes in trade flows while Beijing is warning against new barriers. A broader tariff instrument would give the EU more room to act, but it could also trigger Chinese countermeasures while negotiations are still underway.

We have previously highlighted that EU strategic dependence keeps the bloc exposed in the U.S.-China power contest.

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