EU China trade clash over medical devices

[WORLD] The China Chamber of Commerce to the EU has sharply criticized the European Union’s decision to restrict Chinese medical device makers from participating in public contracts within the bloc. In a June 2 statement, the Chinese group expressed “profound disappointment” over what it sees as a discriminatory application of the EU’s new trade tool, the International Procurement Instrument, introduced in 2022. The group warned that the move complicates China-EU relations and contradicts the EU’s own principles of fairness and openness.

This EU action comes after a formal investigation launched in April 2024 concluded that China discriminates against foreign firms in its domestic medical device market. Despite consultations, no alternative solution was reached. The EU’s measures can include scoring penalties on Chinese bidders or even banning them outright from public procurement contracts, marking the first-ever use of this law intended to promote reciprocal market access.

Tensions rise as Chinese Commerce Minister Wang Wentao is scheduled to meet EU trade officials in June, with a China-EU summit planned for July. While China claims European firms have long benefited from access to its healthcare market, the EU counters that true reciprocity is lacking. This dispute threatens to add friction at a time when Beijing is seeking to present itself as a reliable partner amid strained US-EU ties.

Implications for Business, Consumers, and Policy

For Chinese companies, the EU’s restrictive move could significantly limit access to one of the world’s largest public healthcare procurement markets, directly impacting sales pipelines and potential growth in Europe. Major players like BYD and Cosco Shipping Holdings may need to rethink their European strategies, especially as the EU shows a willingness to escalate trade enforcement.

For European businesses and consumers, the action sends a mixed message. While the EU aims to protect domestic industries and level the playing field, European hospitals and health systems might face reduced competition, which could affect pricing and innovation in the medical device sector. Consumers could indirectly experience the consequences through higher healthcare costs or slower adoption of advanced medical technologies.

At the policy level, this marks a shift in the EU’s trade posture—moving from negotiation-heavy approaches to deploying hard instruments when talks stall. It also sets a precedent that could ripple into other sectors, such as green tech, telecommunications, or electric vehicles, where reciprocal access has been a long-standing issue between Europe and China. Policymakers will have to navigate the delicate balance between protecting European interests and maintaining productive diplomatic ties.

What We Think

This move by the EU signals a new phase in Europe-China trade dynamics: one where patience has worn thin, and leverage is being actively exercised. While China argues that European firms have long benefited from its healthcare market, the EU’s investigation highlights persistent asymmetries that Europe is no longer willing to overlook. “Balanced engagement” will now likely mean concrete, measurable actions—not just diplomatic reassurances.

There is a risk that tit-for-tat measures will follow, potentially spilling over into other industries. European firms operating in China should prepare for possible retaliatory steps, while Chinese companies may seek to ramp up lobbying or concessions to regain access. Importantly, this comes as Europe distances itself somewhat from U.S. trade battles, seeking an independent stance—but that independence cuts both ways.

For global observers, this is a reminder that the era of open, unfettered globalization is giving way to more transactional, rules-based trade relationships. The EU’s willingness to use its new legal tools will shape future market dynamics not just with China, but with other trade partners watching closely. This could ultimately redefine what “openness” means in the context of modern international commerce.