Brussels is drafting a new trade instrument, dubbed an "overcapacity tool,"
reportedly backed by France, Italy and Spain to enable ad hoc limits on imports
from China. At the same time Chinese-made air conditioners are selling out
across multiple European markets; manufacturers report orders for a recent
best-selling model has surged, with Chinese plants running overtime to meet
demand. Chinese-EU trade frictions have increased recently and the EU has
imposed trade limits more frequently; leaders have agreed to seek dispute
resolution through the trade and investment consultation mechanism to balance
concerns and avoid escalation.
