Brussels is considering retaliatory measures against China following a recent expansion of Beijing’s export controls on critical raw materials, a move that EU officials are characterizing as a significant disruption to global supply chains and a potential escalation of trade tensions. Valdis Dombrovskis, European Commissioner for Internal Market, Trade and Services, confirmed to the Handelsblatt that the European Commission is evaluating potential countermeasures, highlighting the severity of the situation.
“We are examining possible responses should conditions not improve” Dombrovskis stated. He added that he is actively coordinating with G7 partners on this emerging challenge. The Commissioner expressed deep concern over the scope of China’s new regulations, emphasizing that they impact entire value chains and pose a direct threat to European industries dependent on these materials.
While the Chinese government claims to be exempting the EU from these restrictions, Dombrovskis asserted that this designation is proving ineffective in practice. “Our industry is reporting a significant backlog within the licensing system, indicating that the exemptions are not functioning as intended” he explained.
The announcement underscores a growing unease within the EU regarding China’s increasingly assertive trade policies. Experts suggest that Brussels is wrestling with the delicate balance of maintaining economic ties with a key trading partner while also safeguarding the resilience of European industries and reducing dependence on potentially unreliable suppliers. The situation is particularly sensitive given the EU’s ongoing efforts to secure critical resources for its green transition and strategic industries and raises questions about the efficacy of current diplomatic engagement with Beijing. The coming weeks are expected to see intensified discussions within the EU and with international allies as policymakers weigh the potential for further action.
