China Strikes Back: Restricts EU Medical Device Imports

As tensions between China and the EU escalate, China imposes limits on EU medical devices in a retaliatory trade move.

China Strikes Back: Restricts EU Medical Device Imports

A new chapter unfolds in the trade tensions between the European Union and China, with both economic giants locking horns over access and trade practices. In a dramatic retaliation, China has announced a limitation on importing medical devices from the EU, a move that raises concerns across industries worldwide.

The Move’s Timing and Implications

The decision by China’s finance ministry to restrict government purchases of EU medical devices exceeding 45 million yuan (\(6.3 million) was publicized on a Sunday and took immediate effect. This development follows the European Union’s recent ban on Chinese firms from bidding on EU public tenders for medical devices, a sector valued at 60 billion euros (\)70 billion) annually, citing unfair access issues for EU companies in China.

A Series of Tit-for-Tat Measures

The backdrop of these events is a progressively strained relationship, highlighted by the EU slapping tariffs on Chinese-made electric vehicles, while China retaliated with duties on imported European brandy. China’s commerce ministry stated that the EU’s restrictive measures left China with no alternative but to reciprocate with its own protective barriers.

Escalating Tensions and Diplomatic Silence

The escalating fallout has left many industries on edge, with other countries also brought into the fray. China will additionally restrict imports of medical devices from non-EU countries if they contain over 50% EU-made components. Meanwhile, the European Commission and EU delegation offices remain silent on the matter.

Global Economic Repercussions

The decision comes as both the EU and China, respectively the world’s second- and third-largest economies, set the stage for a leaders’ summit slated for later this July. The outcome of this summit could be pivotal as both sides navigate these complex trade dynamics.

A Brewing Storm in Global Trade

While brandy producers like Pernod Ricard and Remy Cointreau have dodged immediate duties under specific price conditions, the broader economic landscape is fraught with uncertainty. China’s decision to levy up to 34.9% duties on EU brandy, particularly French cognac, is a sign of broader retaliatory trends against the European automotive sector.

As stated in Reuters, these events highlight the fragile balance in global trade relationships, where economic strategies and diplomatic narratives continually shape the international market landscape.