EU escalates trade war with China: Brussels launches sweeping review, Beijing vows retaliation

The European Union escalates its trade confrontation with China today as Brussels formally launches a sweeping review of Beijing’s market practices, prompting an immediate pledge of retaliation from Chinese officials. The move, announced by EU Trade Commissioner Valdis Dombrovskis, targets alleged state subsidies, forced technology transfers, and unfair competition in sectors ranging from electric vehicles to medical devices, according to a statement cited by the *South China Morning Post* . Beijing’s Ministry of Commerce condemns the review as "protectionist" and warns of "necessary countermeasures," though it stops short of detailing specific actions.

The EU’s hardened stance coincides with Spanish Prime Minister Pedro Sánchez’s state visit to China this week, where trade and investment dominate the agenda. Spanish officials report progress on bilateral deals worth €12 billion, including a memorandum of understanding for Chinese automaker Hongqi to establish a €1.5 billion electric vehicle production hub in Zaragoza by 2028 . The Hongqi deal, part of FAW Group’s push into Europe, underscores Beijing’s strategy to leverage state-backed firms in high-value sectors amid rising EU scrutiny.

In a separate development, a Chinese dissident in the UK accuses British police of employing a pro-Beijing interpreter who allegedly berated him during a 101 emergency call. Hong Qi, a former Chongqing resident known for projecting anti-regime slogans onto buildings in China via remote devices, claims the interpreter—hired by Greater Manchester Police—launched a political tirade after he reported frozen bank accounts, calling him a "traitor" and "CIA asset" . The incident, which the police force says it is "urgently reviewing," highlights growing concerns over Chinese influence in Western institutions.

Meanwhile, Spain’s judiciary investigates former Prime Minister José Luis Rodríguez Zapatero for allegedly receiving €2.3 million from Chinese-linked energy firms and lobbying groups between 2020 and 2025. Court documents in the "Plus Ultra" case, cited by *El Mundo*, link the payments to entities with ties to the Chinese Communist Party, including a subsidiary of state-owned Sinopec . Zapatero’s office denies wrongdoing, calling the allegations "politically motivated."

The EU’s trade offensive reflects a broader shift in Brussels’ approach to China, which officials now classify as a "systemic rival" while seeking to reduce economic dependencies. The bloc’s new strategy, outlined in a leaked draft seen by *Politico*, proposes stricter screening of Chinese investments in critical infrastructure and a crackdown on forced labor in supply chains. Beijing, in turn, has signaled it may retaliate by restricting access to rare earth minerals, a sector where China controls 80% of global refining capacity. Analysts warn the standoff could disrupt €800 billion in annual EU-China trade, with Germany’s automotive and chemical industries particularly exposed.