EU Considers Response to China’s Export Controls
Brussels is evaluating potential retaliatory measures against China following a recent expansion of Beijing’s export controls on critical raw materials, signaling a growing tension in the EU-China trade relationship.. European Commission Executive Vice-President Valdis Dombrovskis, in remarks to the Handelsblatt, confirmed the bloc is “examining possible countermeasures” should the situation not improve, adding that discussions are ongoing with G7 partners.
Dombrovskis highlighted the scope of China’s new regulations, emphasizing their potential to disrupt entire value chains. “This affects whole value chains and that is giving us extreme concern” he stated. While Beijing has ostensibly indicated an exemption for the EU, practical difficulties persist.
Reports from European industry are casting doubt on the efficacy of the touted licensing system. Dombrovskis acknowledged these concerns, stating that the system is “not functioning in practice” and that “there is a continuing significant backlog” effectively limiting access for European businesses.
The development underscores a deepening strategic dilemma for the EU. While maintaining economic ties with China remains a priority, the bloc is grappling with the implications of escalating trade restrictions and the potential for supply chain vulnerabilities. The prospect of countermeasures suggests a willingness to escalate the situation, potentially igniting a protracted trade dispute and further complicating the already strained geopolitical dynamic between Brussels and Beijing. The coming weeks are expected to see intensified diplomatic efforts aimed at resolving the impasse, but the long-term impact on EU-China trade relations remains uncertain.