The prospects for the first meeting of the China-EU trade and investment consultation mechanism, planned for next week, are increasingly uncertain amid growing tensions between the two sides, a source from China’s Ministry of Commerce said Friday. Despite extensive working-level discussions held throughout June, key disagreements remain unresolved, undermining hopes for a productive inaugural session.

According to the ministry source, negotiators from both China and the European Union engaged in intensive talks earlier this month to prepare for the meeting, addressing a wide range of bilateral economic and trade issues. However, progress has been hindered by what the Chinese side describes as the EU’s increasingly protectionist approach toward China, including a refusal to alleviate concerns related to trade barriers and export controls.

The source criticized the European Union for pressing China to respond to issues involving export controls and market access while simultaneously maintaining, and even intensifying, restrictive measures against Chinese businesses within its market. China warned that it would implement countermeasures if the EU introduced new trade or investment restrictions detrimental to Chinese interests, but the source noted that the EU has largely ignored this warning, heightening fears that trade frictions may escalate.

Following last week’s European Council summit in Brussels, European Commission President Ursula von der Leyen reiterated the EU’s intention to employ a broad array of instruments to defend its trade interests more assertively. Reports from European media also indicated that the EU is considering additional tariffs on Chinese-made plug-in hybrid vehicles.

The Commerce Ministry source highlighted several ongoing and proposed EU measures targeting Chinese companies. The European Commission has initiated nine formal foreign subsidy investigations involving Chinese firms, representing over 80 percent of all such cases and significantly impacting Chinese investment activities in Europe. In addition, the commission classified China as a “high-risk country” for certain projects, thereby limiting funding for initiatives utilizing Chinese-manufactured inverters. Negotiations concerning steel tariff-rate quotas have also seen limited EU flexibility despite substantial Chinese losses.

Furthermore, the EU’s anticipated amendments to the Cybersecurity Act and the Industrial Accelerator Act are expected to create new barriers for Chinese companies and products, potentially complicating market access even further.

Contrasting these developments, the China Chamber of Commerce to the European Union, based in Brussels, underscored this week that the growing volume of imports from China ultimately reflects decisions made by European businesses and consumers, suggesting that trade flows continue to be driven by market demand despite political challenges.