China has taken the extraordinary move of banning all Lithuanian products from entering its borders following a diplomatic disagreement, something that could have a significant impact on exporters.
According to the Baltic Times, companies in Lithuania began to report their shipments were suddenly unable to clear customs in China on Thursday (December 2nd 2021).
An investigation discovered Beijing had completely removed Lithuania from its customs system, effectively wiping the Baltic state from the global trade map.
Later, a spokesperson from the foreign ministry confirmed the situation and warned companies to expect potentially significant disruption if they normally trade with China.
The debacle began to escalate in late November, after Lithuania opened a de facto Taiwanese embassy. China continues to view Taiwan as its own territory and disagrees with any effort on Taiwan's part to establish its own statehood, as well as with any other country that appears to show support for its independence.
A tweet from an official in Beijing went on to accuse Lithuania of systemic racism and of a "massacre of Jews in history", before Lithuania criticized Chinese tech companies for what it suggested was espionage.
Now, China has completely halted trade with Lithuania, something Perth USAsia Centre research director Dr Jeffrey Wilson told news.com.au is unprecedented outside wartime.
"Full trade bans are extraordinarily rare. This delisting is - de facto - the most serious trade sanction the PRC can apply. It has never done this before," he added.
Indeed, China has previously banned imports of particular products (such as salmon from Norway or pineapples from Taiwan), but never all goods from a particular country.
According to Politico, Lithuania's minister of foreign affairs Gabrielius Landsbergis has now written a letter to EU Trade Commissioner Valdis Dombrovskis calling for the European bloc's intervention to resolve the matter.
However, this may be something that makes the EU nervous given its own precarious trading relationship with the eastern economic superpower.
The World Trade Organization could be the next stop in the path to resolving this dispute.