China’s recent trade countermeasures: Implications for EU businesses

Introduction and overview
China has recently introduced a series of trade countermeasures in response to international trade barriers, e.g. following the imposition of Section 301 tariffs by the Trump administration in 2018 and through a further amendment on March 3, 2025, to the Executive Order 14195 of February 1 2025, imposing 20 % ad valorem tariffs on Chinese goods.

The recent Chinese approach is broad. Countermeasures are based on retaliation to trade barriers and as a foreign policy instrument. The latter mostly due to US arms trade with Taiwan and US export controls of microchips. The intensity and quick implementation/enforcement of the trade measures are also worth noting.

To date, China has launched at least four rounds of counteraction lists, four new exclusion lists, and 14 rounds of extended exclusions. While these actions are primarily aimed at the US, they also have significant implications for EU businesses involved in international trade.

Notable recent countermeasures include provisional anti-dumping, countervailing, reciprocal and retaliatory measures as well as a new tariff law. We advise EU businesses engaged in international trade to be mindful of the following key points:

• Retaliatory measures against EU will likely follow the ones imposed on US goods and with the same detrimental effects.
• Recently adopted Chinese legislation resembles EU legislation regarding the handling of anti-dumping, anti-subsidy or safeguarding measures, including anti-avoidance investigations.
• The increase of scrutiny and additional costs imposed by China’s evolving tariff and countermeasure strategies calls for more thorough documentation and compliance to avoid increased tariffs. EU exporters to Chinese suppliers must be prepared to enhance their export practice with supporting documentation and if relying on complex trade structures, adhere to the new anti-circumvention regulations.

A new tariff law
Effective December 1, 2024, China’s new tariff law replaces previous regulations. Two important changes include:

1. Reversal of the burden of proof for tariff rates for anti-dumping

For the first time, the reversal of the burden of proof for tariff rates for anti-dumping, countervailing, reciprocal and retaliatory measures has been established, much like corresponding EU legislation. This means that importers must now prove that their goods do not originate from countries subject to these measures. If the tariff payer is unable to do so, or is unable to exclude customs suspicion, it will risk higher tariff rates based on anti-dumping, anti-subsidy or safeguarding measures. EU businesses exporting to China must be proactive in documenting and proving the origin of their goods, which could require more extensive record-keeping and verification processes. Failure to comply could lead to significant cost increases, particularly for companies that rely on complex supply chains.

2. Anti-circumvention measures

The new tariff law also establishes anti-evasion/circumvention measures, reducing opportunities for tax planning, especially related to anti-dumping and countervailing duties. Previously, anti-circumvention measures were limited to adjustments related to the origin of goods, but new regulation expands the scope, allowing both customs and other state authorities (such as the Ministry of Commerce) to initiate investigations into circumvention attempts. These measures target actions aimed at evading tariffs, including misclassifying goods to reduce duties. A key concern is the lack of clear restrictions on what constitutes a “reasonable commercial purpose” leaving businesses vulnerable to anti-avoidance investigations and adjustments, particularly in cases like processing trade designed to circumvent anti-dumping duties.

The tariff law also grants authorities broader powers to prevent tariff evasion, including scrutinizing product classifications and business models, which could impact international trade strategies.

Conclusion and key takeaways
China’s recent trade actions reflect a strategic approach to safeguarding its interests amid global trade tensions. China is both through its adoption of legal acts but also in practicality through their enforcement showcasing a willingness and preparedness to take countermeasures and retaliate to trade barriers.

The methods and legislation adopted – especially regarding anti-evasion – largely resembles the ones adopted by EU and with potential extended burdens on EU exporters to China.

Significant for implemented tariffs are their proportionality and that they are targeted to minimize negative effect on the internal Chinese market. Analyses of market patterns after Chinese countermeasures from the first Trump administration show trends towards reduced Chinese import dependence of US goods and shifting places of origin of imports away from the US.

The Chinese countermeasures of US trade policies targeted against China constitutes clear predictions as to the response to potential future EU trade barriers against China.

Notable insights can also be drawn from Chinese countermeasures in the autumn of 2024 on specific brandy originating from France, as a divide and conquer method to retaliate on France’s support for the EU’s additional tariffs on Chinese imports of electric vehicles.

EU businesses engaged in trade with China should closely monitor these developments, assess their potential impact, and adapt their strategies accordingly to ensure compliance and mitigate risks.

For further information or assistance, please contact the customs team at Svalner Atlas Group.