The European Union Chamber of Commerce in China warned today that China is using export restrictions as a form of political pressure, putting global supply chains at risk.
In a report titled “Export controls: China’s new strategic toolbox,” the organization said that measures initially designed to prevent the proliferation of weapons or dual-use technologies are now being used as a commercial tool — first by the United States and later by China, under the justification of national security.
In China’s case, the clearest example came in April 2025, following tariff escalations launched by U.S. President Donald Trump, when Beijing imposed export controls on rare earths — critical minerals for sectors such as defense and the automotive industry, where China holds a dominant position.
According to the report, the move “pushed some supply chains close to breaking point” and caused “damage” to several companies affiliated with the chamber.
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In October, Beijing expanded those restrictions, later suspending them for one year as part of a trade truce with Washington. However, the report highlights that the move marked a significant expansion of the export control regime, including, for the first time, extraterritorial provisions.
Although China’s Ministry of Commerce maintains that the restrictions do not amount to bans, the chamber argues they function “in practice” as such, due to delays in obtaining licenses, which can take months and disrupt business operations.
The report notes that Beijing views these measures as “reasonable and proportionate” in response to the United States’ own use of export controls as a political tool, but stresses that the European Union does not share this view.
“The accumulation of controls by China, combined with its near-monopoly over critical supply chains and its willingness to use them as leverage, raises fundamental economic and national security concerns for Europe,” the report states.
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Currently, the EU’s dependence on China accounts for about 12% of total imports.
The chamber also warned of a long-term risk, suggesting that Beijing could revoke export licenses based on political considerations, turning the current system into both an approval mechanism and a tool of punishment.
As an example, the report cited restrictions imposed in January on dual-use exports to Japan, following comments by Prime Minister Sanae Takaichi regarding a potential scenario involving Taiwan.
While acknowledging that China is unlikely to abandon these tools, the chamber urged Beijing to find ways to respond to the United States without creating collateral damage for other trading partners.
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The report also noted that both the United States and the European Union are investing in reducing dependencies, promoting the reorganization and regionalization of supply chains.
“The EU’s current dependency could have a disproportionate short-term impact if China applies extraterritorial controls. But in the long term, China’s reputation as a reliable partner could suffer significant and possibly irreversible damage,” the report concluded.
