CNBC's Chery Kang and Elaine Yu discuss what China's move to impose reciprocal tariffs on the import of medical devices from the European Union could mean for an upcoming EU-China summit later this month.

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China has introduced restrictions on government purchases of medical devices imported from the European Union, affecting goods valued at over 45 million yuan (approximately 6.3 million US dollars). This measure is a direct response to similar restrictions imposed by the EU on Chinese companies in the previous month. 

Chinese authorities have described the move as defensive, citing the EU's increasing protectionist policies. The trade dispute now extends beyond medical devices to include sectors such as electric vehicles and luxury goods, with both sides seeking greater leverage ahead of an upcoming summit. The ongoing tensions are expected to influence the agenda and negotiations at the meeting.

China retaliates on EU medical devices

China may have a trade a truce with the United States, but it's ties with the Brussels not looking good. China has just imposed a tit-for-tat curbs on EU based medical device companies. Our Elaine Yu is here to tell us more on what's happened so far and what is expected to happen from this level. Good morning Sherry. So the trade tensions between China and EU are heating up and that now covers EVs, cognac to now imaging equipment. So China's finance ministry on Sunday said it is restricting government purchases of medical devices from Europe worth more than 45 million yuan or that translates into about 6.3 million US dollars and that affects only imports. So not goods that are manufactured by EU funded companies in China. So this is a countermeasure against a similar move by EU in on Chinese companies in June. So Beijing has framed its move as defensive and necessary. The Commerce Ministry put out a separate statement yesterday saying the EU is building new protectionist barriers quote despite China's goodwill and sincerity and it says China has no choice now but to take these reciprocal measures. So you really have this tit-for-tat logic on full display especially ahead of the summit in July. Yeah so how is this going to impact the summit? I mean it can't it can't be good or are they just trying to figure out what is hurting the other party so that maybe they can get a good better deal for themselves. Yeah so remember when Trump's shakeup of the global order had people talking about what that would mean for China-EU ties. So we now know that the tides aren't getting any warmer. So the summit flashpoints will likely include Chinese EVs and French cognac. And if you look at the exemptions on major producers from France if they set minimum prices that China now has for them that mirrors the deal or the discussions that you know about what to do with Chinese EVs. So you now do have a full deck of negotiating cards on the table especially if you throw in rare earths and specifically EU's concerns over the export controls on these critical minerals. So you have both sides posturing now to gain more leverage ahead of these negotiations. Yeah and the chatter is that it could actually be scaled down as well so we'll see how things go. Elaine thank you so much for that to report.

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China retaliates on EU medical devices

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