China Warns EU Against New Trade Curbs, Vows Retaliation

China has renewed warnings to the European Union that it will retaliate against any new trade restrictions imposed by Brussels.

“If the EU insists on unilaterally introducing new trade instruments and imposing discriminatory restrictions, China will resolutely retaliate and take effective measures to safeguard its own interests,” the Ministry of Commerce said in a statement on Saturday.

The ministry said communication channels between China and the EU were open, and both sides sought to conduct relevant dialogues.

It also announced that China and the EU were exploring the establishment of a trade and investment consultation mechanism, but offered no details of the plan.The statement follows European Commission meetings on Friday to discuss potential economic security tools aimed at addressing the bloc’s widening trade imbalance with China.

No immediate measures have been announced, but the EU is expected to ramp up safeguards in sectors that are under severe pressure from Chinese overcapacity.

European Commission President Ursula von der Leyen will present the recommendations to EU leaders at the European Council summit on June 18 and 19.

“The current state of the trade and investment relationship is not sustainable,” Brussels said in a statement after the meeting on Friday, while noting that its approach remained one of “de-risking, not decoupling” from China.

Calls from Europe for a tool similar to the United States’ Section 301 – which allows Washington to investigate and act against countries engaging in “unfair” practices – have grown louder in recent weeks.

According to a report in late May by the London-based think tank Centre for European Reform, a European 301-type instrument would allow Brussels to counter distortions outside traditional trade defences, such as the yuan’s undervaluation, and flexibly target vulnerable sectors, including cars, chemicals and clean energy.

Europe should brace for retaliation from China with restrictions of its own, the report added, noting that Beijing could not risk the complete loss of access to the European market.The EU’s goods trade deficit with China grew to €360 billion (US$420 billion) last year, up from €312 billion in 2024, according to the bloc. Beijing earlier hit out at the EU for selectively using trade data to back its claims of imbalances.