Trade tensions between Brussels and Beijing appear to be deteriorating, with China opening an anti-dumping investigation into European Union subsidies for certain dairy products.
China’s Ministry of Commerce announced the probe on August 21, with the body specifying it will focus on products including cream cheese, curd, blue cheese, and certain types of milk and cream.
China is investigating seven separate subsidies provided under the EU’s Common Agricultural Policy (CAP), as well as other subsidies provided by individual Member States.
The inquiry is set to conclude within 12 months, although it may be extended by an additional six months, according to the ministry.
In total, 20 subsidy schemes from the EU are to be looked into, specifically from Austria, Belgium, Croatia, Czech Republic, Finland, Italy, Ireland, and Romania.
Reuters reported that Ireland was the biggest dairy exporter to China on that list, selling more than €414m worth of such produce in 2023.
In total, the EU exported €1.7bn in dairy products to China in 2023, according to the Directorate-General for Agriculture and Rural Development, down from €2bn in 2022.
Reacting to the announcement by China, Olof Gill, European Commission Spokesperson for Trade and Agriculture, said on X: “The European Commission takes note of the decision by the government of China to initiate an anti-subsidy investigation on imports of certain dairy products from the EU.”
“We will now analyse the application and follow the proceeding very closely, in co-ordination with EU industry [and] Member States.”
“The Commission will firmly defend the interests of the EU dairy industry and the Common Agricultural Policy, and intervene as appropriate to ensure that the investigation fully complies with relevant WTO rules,” Gill added.
The @EU_Commission takes note of the decision by govt of China to initiate an anti-subsidy investigation on imports of certain dairy products from the EU.
We will now analyse the application and follow the proceeding very closely, in coordination with EU industry + MS.
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— Olof Gill (@olofgill) August 21, 2024
Asked about the tensions between China and the EU, a spokesperson for the Belgian Federation of Dairy Producers told Brussels Signal “It regrets that food and agricultural products (and now specifically dairy products) are being used as targets in trade disputes.
“It is important that the EU and China find a constructive way to resolve any bilateral disputes so that this dispute does not need to escalate further.”
China’s move appears to be in retaliation to the EU’s recent tariff increases on Chinese electric vehicles (EVs).
Since last year, EU officials have been investigating Chinese EV manufacturers amid worries they were flooding the European market with low-cost vehicles produced with “unfair” financial support from Beijing.
On Tuesday, August 20, the European Commission slapped a 19 per cent tariff on Teslas imported from China. Other EV manufacturers in China can be put under a surcharge of up to 36 per cent.
The charges are part of the EU’s intention to crack down on excessively subsidised imports from China, with particular emphasis on products related to renewable energy, such as solar panels, wind turbines and electric vehicles.
In October last year, the commission launched a probe into the surge of battery-powered electric vehicle (BEV) imports from China, followed by an anti-dumping investigation into Chinese biodiesel in December.
According to China, it is the EU who is attempting to create unfair competition with its tariff policies. The country has since launched an anti-dumping probe into EU-derived liquor products, with a similar inquiry into EU pork and pork-derived imports being launched in June.
China has launched an anti-dumping probe into European Union liquor products in another sign that trade relations between both are becoming increasingly bitter. https://t.co/tRwdHHY8Hv
— Brussels Signal (@brusselssignal) January 5, 2024
