A new episode in the trade standoff between the EU and China

China is threatening to retaliate after the European Commission's decision to exclude Chinese companies from most public procurement contracts for medical devices. With a summit scheduled in Beijing next month, the EU must conduct trade negotiations with Washington on two fronts.

China is considering retaliatory measures after the European Union's decision to exclude Chinese companies from most public procurement contracts for medical devices, the Chinese Ministry of Commerce announced on Tuesday, fueling trade tensions ahead of a summit scheduled for next month.

The European Commission said on Friday that Chinese companies would be banned from participating in public tenders worth at least €60bn, after concluding that European companies do not have fair access to the Chinese market.

"The European side persists in using unilateral instruments to erect new protectionist barriers, which not only harms the interests of Chinese companies, but also seriously undermines fair competition," the Chinese Ministry of Commerce said in a statement. "We will take the necessary measures to firmly defend the legitimate rights and interests of Chinese companies."

Trade conflict

This is a new battle in the trade conflict between China and the European Union. For years, European countries have been criticizing Chinese subsidies to several industries, arguing that this support distorts competition.

At the end of 2024, initial measures were announced, with tariffs of up to 35.3% on electric vehicles manufactured in China.

In response, China imposed anti-dumping measures on Cognac. Beijing also launched trade investigations into pork and certain European dairy products.

Tense summit

This latest skirmish comes a month before a summit in Beijing that will mark the 50th anniversary of diplomatic relations between the EU and China. European Commission President Ursula von der Leyen and European Council President Antonio Costa are expected to attend.

Beyond the trade disputes already mentioned, the issue of rare earths will be on the agenda. The EU wants China to grant longer export licenses for rare earths, or even to remove them altogether for exports to the bloc.

In any case, Brussels wants Beijing to clearly distinguish between the EU and the US. The export restrictions on rare earths were a response to US tariffs imposed in early April.

The EU is in a delicate position, as it is negotiating with the US at the same time. Donald Trump has threatened the EU with 50% tariffs if an agreement is not reached by July 9, when the 90-day pause on reciprocal tariffs expires. And any rapprochement with China would obviously be frowned upon in Washington.