The European Union on Thursday announced it had lodged a complaint with the World Trade Organization (WTO) over China’s behavior toward EU member state Lithuania, a move Beijing has dismissed as “groundless and inconsistent.”

“Launching a WTO case is not a step we take lightly,” said EU Commissioner for Trade Valdis Dombrovskis. “However, after repeated failed attempts to resolve the issue bilaterally, we see no other way forward than to request WTO dispute settlement consultations with China.”

At issue is Lithuania’s claim of Chinese strong-arming over Vilnius’ decision last July to allow representatives from Taiwan — which China regards as a rebellious territory belonging to mainland China rather than a self-ruled democratic state — to open a diplomatic presence in the Baltic capital.

The move, by one of the EU’s smallest countries, incensed China, provoking Beijing to react in hopes of forcing Lithuania to change its stance.

The European Commission, which handles trade policy for the EU’s 27 member states and leads on conflicts at the WTO in Geneva, Switzerland, said China’s moves included “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.”

In November, China also downgraded diplomatic ties with Lithuania and stopped issuing visas.

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