China Bans EU Medical Devices Worth $6.3 Million in Retaliation

China has implemented a retaliatory ban on government procurement of European Union medical devices valued over 45 million yuan, approximately $6.3 million. This move comes in response to the EU's decision to limit Chinese participation in public tenders for medical devices within its member states, marking the first invocation of the International Procurement Instrument (IPI) by the EU.

The EU justified its restrictions by citing unequal access to China’s medical market, claiming that European companies face unfair competition in Asia’s largest healthcare sector. The EU’s medical device sector generates $70 billion annually. China’s finance ministry announced the ban on Sunday, July 6, which also includes blocking imports of devices from other countries that include more than 50% EU-made components by contract value. This policy does not affect products made by European firms operating within China.

Tensions between the EU and China have been escalating due to a series of trade restrictions. Last month, the European Commission imposed new tariffs on Chinese electric vehicles, citing market-distorting subsidies. In retaliation, China launched an investigation into EU brandy imports, resulting in duties of up to 34.9% on EU-origin brandy, notably French cognac. Major French producers like Pernod Ricard, LVMH, and Remy Cointreau were exempted from these duties under undisclosed conditions.

Analysts view China’s ban on EU medical devices as a strategic move to protect its interests and signal its willingness to push back against European restrictions. China’s finance ministry emphasized the principle of reciprocity, stating that it had no choice but to implement countermeasures after repeated diplomatic efforts were met with resistance. The EU has not yet issued an official response to China’s announcement.

A planned EU-China leaders’ summit scheduled for later this July is expected to focus on economic relations, climate change, and global security. However, the deepening trade rift could overshadow the intended agenda. Observers suggest that the timing of Beijing’s announcement may be a deliberate effort to apply pressure ahead of the summit. While both countries have emphasized the importance of dialogue and cooperation, the current trajectory of trade policy indicates growing fragmentation between the second and third largest economies in the world.

For European medical device manufacturers, the new Chinese restrictions could have a significant impact, particularly for companies that relied on large government contracts. Multinational firms will need to evaluate whether to localize more of their production in China or seek alternative markets. Similarly, the EU’s restrictions will likely continue to exclude Chinese firms from a share of public healthcare tenders in Europe.