The European Commission has agreed on a new, stricter trade policy towards China, citing concerns over industrial impacts. Beijing has responded by vowing retaliation against the bloc's measures.

The European Commission agreed on a tough new approach to trade relations with China, at a rare Beijing-focused debate among Brussels’ leadership on Friday. In a presentation, trade chief Maros Sefcovic laid out why the bloc needed to take stronger steps to defend itself from what is described as a new “China shock” to its industries, according to people briefed on the event. This may require developing a new instrument to compel companies in critical sectors to expand both the number and the...