China warns of retaliation as EU develops new trade defence tool

China’s ambassador to the EU, Cai Run, warned on 5 November 2026 that Beijing would respond with countermeasures if the bloc imposed restrictions it considered discriminatory. His warning comes as the European Commission develops a trade instrument that could block Chinese access to the EU market following serious disruption.

EU Trade Commissioner Maroš Šefčovič said the proposal should be ready before the end of the year. Addressing MEPs, he said it would enable quicker action, including restrictions on goods entering the bloc, against countries harming European interests or treating the EU unfairly.

EU leaders asked the Commission in October to prepare a mechanism for responding rapidly when another country’s political or economic actions seriously affect the bloc’s market. France and Germany had pressed for such a measure earlier that month. Although presented as applying to any country, the instrument would affect Chinese interests.

The EU’s trade deficit with China has reached a record €1 billion a day. Chinese customs figures show that low-cost Chinese imports have increased by 25 per cent over the past year. EU leaders have also requested measures such as tariffs and quotas for imports in the chemicals and machinery sectors.

Trade negotiations between EU and Chinese officials continue at technical level following a 9 October agreement to reduce Chinese hybrid-car imports into the bloc. Šefčovič and Chinese Commerce Minister Wang Wentao are due to meet in March 2027. Meanwhile, the Commission has continued imposing additional duties after product-specific investigations found unfair pricing or Chinese subsidies.