The European Union is debating whether to drop a sensitive trade investigation against China over alleged coercive activity targeting Lithuania, a prospect that’s frustrated officials in Washington, where the incoming Trump team sees it as capitulation to Beijing.

An EU investigation has found discrimination against European companies in China's public procurement market for medical devices, opening up a new front in the bilateral trade dispute. A report published on Tuesday found "clear evidence of China limiting the access of EU medical devices producers to its government contracts in an unfair and discriminatory way".

Donald Trump's Treasury secretary pick, Scott Bessent, told lawmakers at his Senate hearing he backs using tariffs against what he called 'unfair trade practices.' During Trump's first term, the EU and China ducked some duties by buying U.