Beijing warns of retaliation if EU imposes curbs on Chinese businesses

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China's commerce ministry warned it will respond firmly if the EU restricts Chinese businesses or products. The statement comes ahead of EU Trade Commissioner Maroš Šefčovič's expected visit to Beijing next week. China and the EU are engaged in trade talks as Europe seeks to cut its record trade deficit with China by October.
Key Facts
- China's commerce ministry said it will respond firmly if the EU introduces restrictions on Chinese businesses or products.
- EU Trade Commissioner Maroš Šefčovič is expected to visit Beijing next week.
- Germany and France are finalizing a joint paper calling on the European Commission to speed up development of a tool to cut China off from the European market within 24 hours.
- The EU's trade deficit with China is the largest in the world, recently surpassing the U.S.
China's Warning
China's commerce ministry warned it will respond firmly if the EU restricts Chinese businesses or products. The ministry said such actions would seriously undermine mutual trust and disrupt negotiations. The statement was issued late Tuesday, according to a CNBC translation of Mandarin.
EU Trade Pressure
EU Trade Commissioner Maroš Šefčovič warned Beijing must deliver concrete results by October or face harsher measures. He is expected to visit Beijing next week. Rhodium Group's Noah Barkin said Germany and France are finalizing a joint paper calling on the European Commission to speed up development of a tool to cut China off from the European market within 24 hours. Barkin said the measures could mirror the U.S. Section 301 tariff approach.
Trade Deficit
The EU's trade deficit with China is the largest in the world, recently surpassing the U.S. China Customs data accessed through Wind Information shows the deficit. When including services, the EU said it was China's top trading partner, with combined trade of 880 billion euros last year.