Global investors are paying close attention to U.S.-China trade tensions this week. Tensions are simmering as Washington and Beijing accuse each other of undermining last month’s agreement–and officials hint of a possible phone call between U.S. President Donald Trump and Chinese President Xi Jinping this week.
But the U.S. isn’t Beijing’s only headache. On Monday, members of the European Union voted to block Chinese companies from bidding for public procurement tenders for medical devices for contracts valued over 5 million euros ($5.7 million) for the next five years.
It’s the first use of the EU’s “International Procurement Instrument,” a 2022 law designed to encourage reciprocity in overseas procurement markets.
Brussels has accused China of systematically discriminating against European providers. A European Commission investigation in January found that 87% of sampled Chinese public tenders discriminated, directly and indirectly, against imported medical equipment.
The China Chamber of Commerce to the EU called on Brussels to reconsider its decision, saying the measures add “new complexity to China-EU economic and trade relations.”
Medical devices are just one area where Brussels and Beijing are butting heads on trade.
In October, the EU slapped tariffs of up to 45% on Chinese-made electric vehicles to combat what it deemed to be an unfair level of state subsidies.
The EU has also opened anti-dumping and anti-subsidy investigations into wind turbines, wood flooring, trucks, and passenger car tires.
Brussels is also monitoring whether China’s exports are being rerouted to Europe after Trump imposed high tariffs on Chinese goods. It has previously flagged industrial overcapacity in China as a concern, fearing that a flood of cheap goods could threaten European industry.
China has fought back with its own probes, specifically into European brandy, pork and dairy products.
Some of China’s neighbors are also worried about a flood of cheap goods from the world’s second-largest economy. Those fears could spark a “tariff cascade”, as countries erect new import duties to protect their local industries. Vietnam and South Korea both imposed anti-dumping duties on Chinese steel earlier this year.
