Background and Context
In response to the European Union’s recent restrictions, China has announced measures against importing medical products from the EU. The Chinese Ministry of Finance stated on Sunday that public purchases of medical products exceeding 45 million yuan (approximately $6.3 million) from the EU will be restricted.
EU’s Initial Restrictions
The tensions between China and the EU have escalated recently. The EU imposed tariffs on electric vehicles manufactured in China, while China levied tariffs on brandy imported from the bloc. In response to these actions, the EU announced last month that Chinese companies would no longer be eligible for public procurement contracts worth €60 billion ($70 billion) annually or more, as EU companies were deemed to lack fair access in China.
Instrument of EU’s Public Procurement International
This measure was the first implemented under the EU’s Instrument of Public Procurement International, which took effect in 2022. The instrument aims to ensure reciprocal market access.
China’s Retaliatory Measures
As anticipated, China’s Ministry of Commerce had previously referred to “necessary steps” against the EU’s measure. The Ministry of Commerce released a statement on Sunday, expressing regret that despite China’s goodwill and sincerity, the EU insisted on pursuing its own path by implementing restrictive measures and constructing new protective barriers.
“Therefore, China has no choice but to adopt reciprocal restrictive measures.”
The EU delegation’s office in Beijing did not immediately respond to a request for comment.
Expanded Import Bans
In addition to the restrictions on EU medical products, China will also limit imports of medical products from other countries if they contain components manufactured in the EU exceeding 50% of the contractual value, according to the Ministry of Economics. These measures took effect on Sunday.
The Ministry of Commerce clarified that products from European companies manufactured in China will not be affected.
Upcoming Summit and Additional Tariffs
The world’s second-largest and third-largest economies will hold a leaders’ summit in China later this month.
On Friday, China also announced tariffs of up to 34.9% for five years on brandy from the EU, primarily cognac from France, following an investigation largely believed to be a response to the EU’s tariffs on electric vehicles.
However, major cognac producers such as Pernod Ricard, LVMH, and Remy Cointreau were exempt from the tariffs, provided they sell at a minimum price that China has not disclosed.
Key Questions and Answers
- What prompted China’s retaliatory measures? The EU imposed tariffs on electric vehicles manufactured in China and levied tariffs on brandy imported from the bloc, prompting China’s response.
- What is the EU’s Instrument of Public Procurement International? It is a regulation that ensures reciprocal market access for public procurement contracts worth €60 billion ($70 billion) annually or more.
- Which products are affected by China’s new import restrictions? Medical products from the EU exceeding 45 million yuan ($6.3 million) and medical products from other countries containing more than 50% EU-manufactured components are affected.
- Who are exempt from China’s tariffs on cognac? Major producers such as Pernod Ricard, LVMH, and Remy Cointreau are exempt if they sell at a minimum price set by China, which has not been disclosed.
