China has recently escalated tensions with the European Union by opening an anti-subsidy probe into imported dairy products. This move comes shortly after Brussels released a revised draft decision regarding tariffs on electric vehicles made in China. Let’s take a closer look at the various industries that are currently under investigation by China.
DAIRY Industry Probe
The anti-subsidy investigation on dairy products will cover a range of items including cheeses, milks, and creams intended for human consumption. This action was initiated following a complaint by the Dairy Association of China and the China Dairy Industry Association. China will be scrutinizing 20 subsidy schemes from different EU countries, such as Austria, Belgium, Croatia, Czech Republic, Finland, Italy, Ireland, and Romania. In 2023, the EU was China’s second-largest source of dairy products after New Zealand, accounting for at least 36% of total imports.
China also announced an anti-dumping investigation into pork imports for human consumption. The probe will focus on fresh, cold, and frozen pork cuts, as well as pig organs like intestines, bladders, and stomachs. The complaint leading to this investigation was filed by the China Animal Husbandry Association on behalf of the domestic pork industry. If China restricts pork imports from the EU, suppliers from South America, the U.S., and Russia could gain market share. In 2023, the EU supplied more than half of the $6 billion worth of pork imported by China, with Spain alone accounting for a quarter of that total. Other significant EU pork exporters to China include the Netherlands and Denmark.
BRANDY Sector Decision
Despite finding that EU brandy was being sold below market prices in China, the Chinese commerce ministry decided not to impose provisional tariffs on these imports. This decision affects French companies like Remy and Pernod, which are major players in the cognac market. The French cognac industry dominates China’s EU brandy imports, and industry insiders suspect that the probe may be tied to broader trade disputes rather than just liquor market concerns.
In May, Beijing initiated an anti-dumping investigation into POM copolymers, a type of engineering plastic, that is imported from the EU, U.S., Japan, and Taiwan. This move adds to the growing list of industries where China is exploring potential trade violations and seeking to protect its domestic market.
China’s recent actions highlight the increasing scrutiny and tensions in its trade relationships, particularly with the European Union. The probe into dairy products, pork, brandy, and plastic underscores China’s efforts to safeguard its industries and address concerns related to unfair competition and trade practices. As these investigations unfold, the global trade landscape continues to evolve, with potential implications for various sectors and economies worldwide.