Accusations and investigations over each other’s trade practices have long been a staple of EU-China trade relations, underpinned by concerns over how domestic economies are likely to be impacted by competing imports.

In recent weeks, EU restrictions on Chinese companies taking part in public tenders for medical devices were quickly met with China imposing import curbs on such products. Separately, long-threatened Chinese duties on brandy from the EU came into force earlier this month, and both Beijing and Brussels have ramped up criticism of each another.

Altogether, EU-China trade relations are now “quite poor,” according to Marc Julienne, director of the Center for Asian Studies at the French Institute of International Relations (Ifri).

A sour relationship

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China’s economy is facing a gap between its production capacity and demand. It is also struggling with sluggish growth, while exports, which long boosted the economy, have been under pressure amid global trade tensions and lower demand.

Ifri’s Julienne also flagged a series of concerns that make the EU-China relationship tricky, including an increasingly difficult environment for foreign companies operating in China and Europe’s growing trade deficit. Additionally, he said Beijing was “weaponizing” trade to put pressure on Europe — like they did with the brandy tariffs.

China first started investigating European brandy imports after the EU began slapping levies on Chinese-made electric vehicles last year, which pose steep competition to Europe-made alternatives.

U.S. tariffs impacting EU-China relations

U.S. President Donald Trump’s recent tariff regime could have been an opportunity for China and the EU to improve their relations, according to Ifri’s Julienne.

“It should have had a positive impact on the bilateral relationship, in the sense that — facing economic coercion from the United States — [the EU and China] — might have been expected to negotiate and compromise in order to make the most of their trade relationship amid the US tariff war,” he said.

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After initial sharp escalations and tense negotiations, China and the U.S. confirmed a trade framework agreement in June, including provisions around hotly contested rare earths and tech regulations. Earlier this year, Beijing had imposed export restrictions on several rare earth elements and magnets, which are often used in the automotive, defense and energy sectors, as part of its response to initial U.S. tariffs. [...]

>Read the article on CNBC.