China Imposes New Import Restrictions in Response to EU Trade Dispute

In a significant escalation of the ongoing trade conflict between China and the European Union, China has announced new restrictions on the import of medical devices from the EU. Effective July 6, the Chinese finance ministry declared that government purchases of EU-made medical equipment exceeding 45 million yuan will be limited, directly responding to the EU's recent ban on Chinese firms from accessing public tenders for medical equipment valued at over 60 billion euros annually.

This intensifying trade confrontation is characterized by a series of retaliatory measures as both sides impose tariffs and restrictions. The EU's recent decision to impose tariffs on electric vehicles from China has prompted Beijing to initiate an investigation into imported European brandy, leading to newly announced tariffs targeting this sector. Additionally, the Chinese finance ministry indicated that the new limitations would extend to any foreign medical device contracts if over half of the contract value comprises components sourced from the EU.

China's commerce ministry expressed regret over the situation, stating that despite its efforts for cooperation, the EU continues to impose restrictive measures, leaving China with no alternative but to respond with equivalent restrictions. Notably, existing EU companies operating in China will remain unaffected by these new policies. As this trade standoff unfolds, it takes precedence over an upcoming leaders' summit originally anticipated to alleviate tensions between the two global economic powers.

In another development linked to this trade dispute, China announced the implementation of five-year tariffs, reaching as high as 34.9 percent, on European brandy products, particularly targeting French cognac, as a form of reprisal against the EU's vehicle tariffs. However, some major cognac producers may circumvent these tariffs if they comply with undisclosed minimum pricing requirements.