Heated Trade Dispute: China Threatens Retaliation Against Market Protection Measures Initiated by France and Germany

Trade tensions between Beijing and Brussels have escalated, as the Chinese Ambassador to the European Union, Cai Run, warned of retaliatory measures should European nations adopt unilateral actions targeting Chinese interests. These warnings come as the European Commission prepares a stringent trade defense instrument dubbed the "Kill-switch," designed to block or restrict the access of Chinese products to the European single market in the event of severe disruptions caused by trade practices deemed aggressive.

The Chinese ambassador emphasized that his country rejects the "politicization of economic and trade issues, and the overstretching of the concept of security," stressing that "if the European side insists on taking restrictive and discriminatory measures, China will be forced to take countermeasures to firmly defend its interests."

French-German Initiative to Protect Industry and Jobs

These developments unfold as the European Union faces an unprecedented trade deficit with Beijing, reaching €1 billion per day, driven by a 25% surge in low-cost Chinese imports over the past year, according to Chinese customs data. France and Germany are the driving force behind these measures, with Paris and Berlin pressing since early last October to develop this mechanism, as every EU member state now records a trade deficit with Beijing, threatening vital industrial sectors and thousands of jobs relied upon by the continent's workers and residents, including a broad segment of residents in France.

European Commissioner for Trade, Maroš Šefčovič, stated before the European Parliament that this tool will be presented before the end of the year, emphasizing that it will enable the EU to react swiftly and restrict imports that inflict direct harm on European interests, warning that the issue now affects thousands of jobs and causes deep concern among citizens.

Threatened Sectors and Anticipated Preventive Measures

Despite ongoing technical negotiations between both sides to regulate trade ties since last June, European leaders are calling for urgent restrictions, including tariffs and quota systems, particularly in the chemicals and machinery sectors, where economic pressures have become unbearable for manufacturers inside Europe. This follows an agreement reached on October 9 to reduce imports of hybrid cars from China, in an effort to replicate the approach across other sectors, ahead of an anticipated meeting between Šefčovič and Chinese Commerce Minister Wang Wentao in March 2027.

These tensions remain an ongoing source of concern for labor markets and businesses in France, particularly as other European legislations are being debated, such as the "Industrial Accelerator Act," which aims to restrict public procurement and impose strict investment conditions to protect the economic sovereignty of the European Union.