China Responds to EU Ban with Restrictions on Medical Device Imports

In an escalating trade dispute, China has announced new restrictions on the purchase of medical devices from the European Union, signaling a retaliatory move against EU sanctions imposed last month. 

The new measures, which will impact government purchases of medical devices valued at over 45 million yuan (approximately $6.3 million), come amid heightened tensions between the two economic giants.

The Chinese Ministry of Finance made the announcement on Sunday, confirming that these restrictions would apply to the import of medical devices, including those with over 50% European-made components. The move follows the European Commission’s decision in June to block Chinese companies from participating in public tenders for medical equipment worth nearly €60 billion ($70 billion) annually.

The EU’s ban on Chinese companies, implemented through the EU’s international procurement mechanism which took effect in 2022, was designed to promote reciprocal access to markets. This mechanism aims to ensure that the European Union enjoys equal access to foreign public procurement markets, particularly with countries that impose restrictions on EU businesses.

At the heart of this policy shift was the desire for fairness in international trade, a sentiment echoed by European officials at the time. However, the move quickly drew ire from Beijing, which saw it as a violation of the principles of open market access.

In a separate statement, China’s Ministry of Commerce expressed regret over the escalating conflict, stating, “Despite China’s goodwill and flexibility, the European Union insisted on imposing new restrictions and erecting protective barriers.” The ministry also emphasized that the Chinese government had “no choice but to adopt similar measures in retaliation.”

China’s response underscores the growing economic rivalry between the two entities, as trade disputes between them intensify. This marks the latest in a series of retaliatory measures that Beijing has taken against European sanctions, particularly in the wake of EU tariffs on Chinese electric vehicles.

The Chinese Ministry of Finance further elaborated on the scope of the new restrictions, revealing that they would extend to medical devices imported from other countries, provided that more than 50% of their components are of European origin. The new regulations are set to take effect immediately.

However, Beijing clarified that medical products manufactured by European companies within China would be exempt from these measures, reflecting China’s ongoing efforts to balance trade retaliation with its role as a global manufacturing hub.

In a parallel move, China imposed additional tariffs of up to 34.9% on European brandy, particularly targeting French cognac, for a period of five years. 

This action is widely seen as another retaliatory gesture in response to the EU's electric vehicle tariffs. However, several major European liquor companies, including Pernod Ricard, LVMH, and Rémy Cointreau, have managed to avoid these tariffs by agreeing to sell their products at undisclosed lower prices, according to Chinese authorities.