The European Commission said China has retaliated with trade restrictions, which “include a refusal to clear Lithuanian goods through customs, rejection of import applications from Lithuania, and pressuring EU companies operating out of other EU member states to remove Lithuanian inputs from their supply chains when exporting to China”.

The end result of consultations and adjudications could be to allow Brussels to retaliate with tariffs on imports from China.

European nations more commonly use the name of Taiwan’s capital, Taipei, to avoid incurring Chinese wrath.

The Commission’s decision to launch a case came after the German government was reported to be seeking allies within the EU against taking action on China.

Officials close to the new Chancellor, Olaf Scholz, are pushing for other nations to encourage Brussels to take a softer stance on Beijing, Politico reported.

China was Germany’s second-biggest export market in 2020, according to the Federal Statistics Office, and the biggest source of imports.

German factories rely particularly heavily on trade with China, which has been heavily disrupted by Covid shutdowns, shipping problems and spiralling costs since Covid struck last year.