China warns the EU against new trade curbs but keeps the door open to talks
China said on Thursday that it prefers dialogue with the European Union but will take “all necessary measures” if Brussels imposes discriminatory restrictions on Chinese products. Commerce Ministry spokeswoman Huang Ling was responding to reports that the EU is weighing extending its recent trade understanding on hybrid vehicles to other sectors, including chemicals. Her message had two parts: Beijing wants to keep talking, and it is prepared to retaliate. The original report comes from China Daily, a state-run outlet that gives only the Chinese government’s side, so the EU’s position needs to be filled in from other sources.
The background is documented. EU imports of Chinese hybrid vehicles rose from 3,800 units in October 2024 to 50,000 in July 2026, according to the Financial Times, after Brussels imposed duties on Chinese battery electric vehicles that did not cover hybrids. In early October, the two sides announced an understanding. China said it complied with WTO rules and gave no terms, while EU trade chief Maroš Šefčovič said on X that it includes halving China’s exports of hybrid and plug-in hybrid vehicles to the EU, along with better market access and easier rare-earth export licensing. The two descriptions differ in emphasis, and the details of how it will be implemented are still unclear. That gap is worth watching.
The new trigger is a report that the EU may do something similar elsewhere. Bloomberg reported on Monday that Brussels is planning “safeguard measures” covering Chinese chemicals, furniture and machinery, citing people familiar with the matter. Global Times, citing Reuters, says EU trade ministers discussed possible measures involving chemicals and machinery on October 23. EUobserver reports the bloc is preparing to curb Chinese imports of chemicals and industrial machinery, following the hybrid deal. None of this is a formal proposal yet, and I could not find an official Commission announcement.
Huang’s arguments are worth setting against the EU’s. She said artificial restrictions on normal trade could violate WTO rules, would not improve European competitiveness, would burden downstream industries, push up inflation and disrupt supply chains. The word “could” matters. Safeguard measures are a recognised WTO tool, although they have conditions, such as showing a surge in imports that causes serious injury, so the legal question depends on how any measure is designed. The EU’s case, per the FT, is that a surge in Chinese exports, including chemicals, batteries and vehicles, has been driven by overcapacity. China rejects that, and Huang said China is “not the root cause” of the bloc’s problems.
The weight of Beijing’s warning is its mix of carrot and stick. She pointed to the recent second meeting of the China-EU trade and investment consultation mechanism, which produced agreements, and said both sides can solve differences through talks. Global Times adds that the outcomes included an understanding on hybrids and an agreement to explore possible tariff reductions on certain goods. Against that, “all necessary measures” is a standard formula in Chinese trade statements, and it does not name a response. The usual options in past disputes have included anti-dumping probes on European goods and export licensing, but nothing has been announced here.
The hybrid deal also shows how the EU has been approaching China. It used the threat of tariffs to secure a negotiated cap, and reports say it has asked Beijing to show restraint on chemicals and to buy more European goods. If the same method is applied to chemicals, the next round would be about negotiated limits, not formal duties. That would suit both sides better than a tariff war, but it would also put pressure on European buyers who depend on Chinese inputs, which is the inflation argument Huang made.
What is established and what is not: Huang’s statement, the hybrid understanding and the surge in hybrid imports are documented. The EU’s plans for chemicals, machinery and furniture rest on anonymous-source reports and ministerial discussions, not a formal proposal. China’s retaliation plans, the real terms of the hybrid cap and the shape of any chemicals measure are unknown.
Sources: China Daily (global), China Daily Europe (follow-up), Global Times, EUobserver, CnEVPost (hybrid understanding), CnEVPost (EU plans), The Standard (FT report) and IDN Financials.
