China Rejects US Drone Tariffs and Blocks EU Subsidies Inquiry Requests

China's Ministry of Commerce has sharply criticized recent trade and regulatory actions by the United States and the European Union. At an August 20 press briefing, spokesperson He Yadong urged Washington to revoke Section 232 tariffs on Chinese drones and components, emphasizing their civilian applications, while rejecting a White House report on transshipment. Meanwhile, Beijing issued a formal prohibition order on August 19 under its anti-extraterritoriality regulations to block European Union regulators from demanding domestic banking information in an ongoing Foreign Subsidies Regulation investigation involving e-commerce group JD.com.

Beijing's responses demonstrate its willingness to actively deploy legal countermeasures against foreign regulatory actions. By issuing its second blocking order against EU Foreign Subsidies Regulation (FSR) inquiries, China is establishing clear operational boundaries to shield domestic financial records and corporate data from foreign administrative scrutiny, while concurrently resisting broadening US trade restrictions aimed at supply chains and civilian technology.

China's Ministry of Commerce (MOFCOM) has condemned recent United States trade actions on drones and transshipment while issuing a new prohibition order to block European Union regulatory demands on domestic banks, according to statements made by ministry spokesperson He Yadong during an August 20 press conference. Addressing Washington's recent decision to impose Section 232 national security tariffs on imported drones and related components, He stated that China firmly opposes the measure. According to He, Chinese drone exports to the US are primarily intended for civilian applications, including agriculture, infrastructure inspection, and film production. He argued that the US measure generalizes national security concepts and applies discriminatory tariff rates to Chinese products, urging Washington to immediately withdraw the tariffs to avoid disrupting global industrial supply chains. He also pushed back against a recent report released by the White House Office of Trade and Manufacturing Policy regarding transshipment networks. The spokesperson dismissed allegations of a "shadow transshipment network" designed to bypass trade controls, describing the report as an attempt to mischaracterize standard international trade and investment. He asserted that high, differentiated tariffs imposed by the US are the primary source of supply-chain instability. Concurrently, MOFCOM addressed Beijing's latest countermeasure against the EU's Foreign Subsidies Regulation (FSR). On August 19, Chinese authorities issued a prohibition order under the *Regulation on Counteracting Unjustified Extra-territorial Application of Foreign Legislation and Other Measures* regarding an EU investigation into Chinese e-commerce company JD.com. According to He, European regulators improperly demanded extensive, unrelated domestic records from Chinese banking institutions in connection with the JD.com inquiry. The Chinese government determined these cross-border investigative practices constituted unjustified extraterritorial jurisdiction and formally prohibited organizations and individuals within China from executing or assisting in the execution of the EU's requests. This marks Beijing's second such blocking action under the FSR, following an initial prohibition order issued in May regarding an investigation into security equipment manufacturer Nuctech. MOFCOM urged the EU to correct its practices and resolve trade issues through bilateral government dialogue.