China’s ambassador to the European Union, Cai Run, threatened retaliation if the bloc adopts unilateral measures against Chinese interests, as the European Commission develops a trade-defence instrument, dubbed a “kill-switch,” that could cut off Chinese access to the EU market in the event of serious market disruption caused by its aggressive trade policies.
The warning comes as the European Commission works on the tool amid a surge in cheap Chinese imports, which have risen 25% over the past year, according to Chinese customs, and a record-high EU trade deficit with China of €1 billion a day. EU leaders instructed the Commission last October to develop an instrument that could be rapidly deployed against countries whose actions have serious repercussions for the EU market, with France and Germany pushing for it earlier that month.
EU Trade Commissioner Maroš Šefčovič told MEPs on Wednesday that the tool should be presented by the end of the year and would allow the EU “to react much faster, even by limiting the exports into the European Union.” It would target “countries which are treating us [the EU] unfairly or which are harming European interests,” he said. Presented as country-agnostic, the tool would nevertheless directly target Chinese interests, which rely on the EU’s 450 million consumers.
Cai Run said on Thursday that “China opposes politicising economic and trade issues, overstretching the concept of security, and resorting to unilateral or maximum pressure.” He added: “If the EU side insists on adopting restrictive and discriminatory measures against China, China will have to take countermeasures to firmly safeguard its interests.”
The threat is not the first from Beijing. China has previously threatened the EU with countermeasures over the Industrial Accelerator Act, which seeks to limit access to EU public procurement and impose strict conditions on investments in the EU market.
Despite ongoing talks since June to rebalance trade, the Commission has continued to impose additional duties on Chinese imports following product-by-product investigations that found Chinese producers were benefiting from unfair pricing or subsidies from China. The Commission reached a deal in October to reduce Chinese imports of hybrid cars into the EU, and technical talks have resumed. A new meeting between Šefčovič and China’s Commerce Minister Wang Wentao is scheduled for March 2027. EU leaders have also asked the Commission to adopt measures, including quotas and tariffs, against Chinese imports in the chemicals and machinery industries, as pressure on the EU market has become unsustainable for European producers.
Analysis
Why This Matters
- The EU’s adoption of a “kill-switch” tool could escalate trade tensions with China, affecting European industries and consumers reliant on Chinese goods.
- It marks a significant shift in EU trade policy towards more aggressive protectionism as the bloc seeks to reduce its trade deficit.
- The outcome may set a precedent for how the EU handles economic competition with state-backed Chinese production across multiple sectors.
Background
The EU has long grappled with a growing trade imbalance with China, which has intensified as Chinese exports of electric vehicles, chemicals, and machinery have surged. Brussels has launched several investigations into alleged unfair subsidies and pricing, leading to additional tariffs. The new “kill-switch” instrument is the latest and most powerful proposed tool, designed for rapid deployment without lengthy industry-by-industry investigations.
Key Perspectives
China (Ambassador Cai Run): Opposes politicising trade and warns of countermeasures if the EU imposes restrictive measures.
European Commission (Trade Commissioner Maroš Šefčovič): The tool is necessary to protect European industry from unfair trade practices and should allow the EU to react much faster, even by limiting exports.
What to Watch
- The European Commission is expected to present the “kill-switch” instrument by the end of 2026.
- A meeting between Šefčovič and China’s Commerce Minister Wang Wentao is scheduled for March 2027.
- Additional EU measures on Chinese chemicals and machinery are anticipated, including possible quotas and tariffs.
Checked
12 claims in this story checked against 1 source: 11 supported.
Show each claim
- SupportedChina’s ambassador to the EU threatened retaliation if the bloc adopted unilateral measures against Chinese interests.Euronews: “China’s ambassador to the EU, Cai Run, threatened on Thursday to retaliate if the EU adopted unilateral measures against Chinese interests.”
- SupportedThe European Commission is developing a trade-defence tool that could cut off Chinese access to the EU market if its aggressive trade policies cause serious market disruption.Euronews: “the European Commission is working on a new trade defence tool, dubbed a “kill-switch,” that could cut off Chinese access to the EU market in the event of serious market disruption caused by its aggressive trade policies.”
- SupportedCai Run said: “China opposes politicising economic and trade issues, overstretching the concept of security, and resorting to unilateral or maximum pressure.”Euronews: ““China opposes politicising economic and trade issues, overstretching the concept of security, and resorting to unilateral or maximum pressure,” Cai said.”
- SupportedCai Run said: “If the EU side insists on adopting restrictive and discriminatory measures against China, China will have to take countermeasures to firmly safeguard its interests.”Euronews: “He added: “If the EU side insists on adopting restrictive and discriminatory measures against China, China will have to take countermeasures to firmly safeguard its interests.””
- SupportedChinese imports have risen 25% over the past year, according to Chinese customs.Euronews: “low-cost Chinese imports, which have surged by 25% over the past year, according to Chinese customs.”
- SupportedThe EU has a record-high trade deficit with China of €1 billion a day.Euronews: “the EU faces a record-high trade deficit with China of €1 billion a day”
- Partly supportedEU leaders instructed the Commission last October to develop a rapidly deployable instrument against countries whose actions have serious repercussions for the EU market.Euronews: “Last October, EU leaders tasked the European Commission with developing an instrument that could be rapidly deployed against countries whose political or economic actions have serious repercussions for the EU market.”
- SupportedŠefčovič told MEPs on Wednesday that the tool should be presented by year-end and allow the EU “to react much faster, even by limiting the exports into the European Union.”Euronews: “EU Trade Commissioner Maroš Šefčovič told MEPs on Wednesday that the tool should be presented by the end of the year and would allow the EU “to react much faster, even by limiting the exports into the European Union.””
- SupportedŠefčovič said the tool would target “countries which are treating us [the EU] unfairly or which are harming European interests.”Euronews: “He added that it would target “countries which are treating us [the EU] unfairly or which are harming European interests.””
- SupportedThe tool is presented as country-agnostic but would directly target Chinese interests, which rely on the EU’s 450 million consumers.Euronews: “Presented as country-agnostic, the tool would nevertheless directly target Chinese interests, which rely heavily on the EU’s 450 million consumers to sell their excess of production.”
- SupportedChina has previously threatened the EU with countermeasures over the Industrial Accelerator Act, which seeks to limit access to EU public procurement and impose strict conditions on investment in the EU market.Euronews: “It already did so against a bill – the Industrial Accelerator Act - currently under discussion by the EU’s co-legislators seeking to limit access to EU public procurement and impose strict conditions on investments in the EU market”
- SupportedA new meeting between Šefčovič and China’s Commerce Minister Wang Wentao is scheduled for March 2027.Euronews: “A new meeting between Šefčovič and China’s Commerce Minister Wang Wentao is scheduled for March 2027.”