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.

Trump, who will be inaugurated next week, has threatened the EU with tariffs and his team has criticized the bloc for being weak on China. The manner in which the EU handles the dispute will present an early test of how the world approaches trade under the new administration in Washington and the resilience of the transatlantic relationship.

Brussels is considering which punitive measures to take after investigation concludes Beijing is restricting public procurement market.

The proposed meeting signals to Washington, days before Trump’s inauguration, that Brussels wants to keep its options open toward Beijing.

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.