HONG KONG: China has fired back at the European Union in an escalating trade dispute by imposing new restrictions on medical device imports, just weeks after Brussels blocked Chinese firms from accessing lucrative EU procurement contracts.

Beijing's finance ministry announced on July 6 that it would restrict government purchases of EU-made medical devices exceeding 45 million yuan (US$6.3 million) in value. The move marks a direct response to the European Commission's decision last month to bar Chinese firms from participating in public tenders for medical equipment worth over 60 billion euros ($70 billion) annually.

Tensions have been mounting between the world's second and third-largest economies. The EU recently slapped tariffs on Chinese electric vehicles, prompting China to launch a probe into European brandy imports, culminating in fresh duties announced this week.

Beijing's latest action also extends beyond EU-only goods. The finance ministry said China will restrict government purchases of medical devices from any country if over 50 percent of the contract's value comes from EU-made components. These measures take effect immediately.

"Regrettably, despite China's goodwill and sincerity, the EU has insisted on going its way, taking restrictive measures and building new protectionist barriers," China's commerce ministry said in a separate statement. "Therefore, China has no choice but to adopt reciprocal restrictive measures."

The EU delegation in Beijing has not yet responded to the announcement.

China's latest move comes under the shadow of a leaders' summit scheduled later this month, which had been expected to ease trade frictions. Instead, the standoff appears to be intensifying.

Notably, China clarified that EU firms already operating inside the country will not be affected by these new restrictions.

Separately, late last week, China announced five-year tariffs of up to 34.9 percent on European brandy, primarily impacting French cognac, after concluding a months-long investigation seen as retaliation for the EU's EV duties.

Major cognac producers—including Pernod Ricard, LVMH, and Remy Cointreau—were exempt from the tariffs if they met minimum pricing thresholds. China has not publicly disclosed those minimums.