China Initiates Anti-Subsidy Investigation into EU Dairy Imports
Source: DairyNews.today
China's Ministry of Commerce has officially launched an anti-subsidy investigation into certain dairy products imported from the European Union (EU), signaling an escalation in the ongoing trade tensions between the two economic powerhouses. This latest move targets European milk and cheese producers, potentially subjecting them to new tariffs.
The probe, announced on Wednesday, focuses on alleged subsidies provided by the EU and individual member states to their dairy sectors. The investigation is expected to cover a wide array of dairy products, including fresh and processed cheese, blue cheese, and milk and cream with a fat content exceeding 10%. The scrutiny will particularly concentrate on subsidies under the EU's Common Agricultural Policy (CAP) as well as those granted by eight member states, notably Italy, Finland, and Croatia.
This development follows closely on the heels of the European Union's recent decision to impose tariffs on electric vehicles (EVs) manufactured in China. The EU's move, which solidifies provisional tariffs introduced last month, has been met with staunch opposition from the Chinese government and the nation's automakers, who argue that such measures could significantly hinder the global expansion of China's EV industry.
The Chinese Ministry of Commerce's decision to investigate EU dairy subsidies appears to be a direct response to the EU's actions against Chinese EVs. Previous investigations initiated by China have already targeted European exports of brandy and pork, suggesting a pattern of retaliatory measures that could lead to an all-out trade conflict.
The European Union Chamber of Commerce in China has expressed concern over this escalating tit-for-tat strategy, noting, "Regrettably, the use of trade defense instruments by one government is increasingly being responded to seemingly in kind by the recipient government."
In parallel, China has lodged a formal complaint with the World Trade Organization (WTO) in reaction to the EU's provisional EV tariffs. The EU Commission, however, maintains that its investigation and the resultant tariffs are fully compliant with WTO regulations.
The EU's draft decision on the final EV tariffs has only made minor adjustments to the initial rates. For instance, vehicles exported by BYD, China's leading EV manufacturer, would face a 17% tariff, while Shanghai-based SAIC Motor could see tariffs as high as 36.3%. Notably, Tesla, which exports from its Shanghai Gigafactory, received a 9% tariff "at this stage" following a review of the specific subsidies it benefits from, as reported by the EU Commission.
These tariffs are currently pending approval by EU member states, with a final determination required by early November, four months after the provisional tariffs took effect on July 5th.
As the situation unfolds, the dairy industry in the EU faces potential disruption, with Chinese market access at risk depending on the outcome of the investigation. This scenario underscores the broader implications of trade policies and retaliatory measures in a globalized economy.
This development follows closely on the heels of the European Union's recent decision to impose tariffs on electric vehicles (EVs) manufactured in China. The EU's move, which solidifies provisional tariffs introduced last month, has been met with staunch opposition from the Chinese government and the nation's automakers, who argue that such measures could significantly hinder the global expansion of China's EV industry.
The Chinese Ministry of Commerce's decision to investigate EU dairy subsidies appears to be a direct response to the EU's actions against Chinese EVs. Previous investigations initiated by China have already targeted European exports of brandy and pork, suggesting a pattern of retaliatory measures that could lead to an all-out trade conflict.
The European Union Chamber of Commerce in China has expressed concern over this escalating tit-for-tat strategy, noting, "Regrettably, the use of trade defense instruments by one government is increasingly being responded to seemingly in kind by the recipient government."
In parallel, China has lodged a formal complaint with the World Trade Organization (WTO) in reaction to the EU's provisional EV tariffs. The EU Commission, however, maintains that its investigation and the resultant tariffs are fully compliant with WTO regulations.
The EU's draft decision on the final EV tariffs has only made minor adjustments to the initial rates. For instance, vehicles exported by BYD, China's leading EV manufacturer, would face a 17% tariff, while Shanghai-based SAIC Motor could see tariffs as high as 36.3%. Notably, Tesla, which exports from its Shanghai Gigafactory, received a 9% tariff "at this stage" following a review of the specific subsidies it benefits from, as reported by the EU Commission.
These tariffs are currently pending approval by EU member states, with a final determination required by early November, four months after the provisional tariffs took effect on July 5th.
As the situation unfolds, the dairy industry in the EU faces potential disruption, with Chinese market access at risk depending on the outcome of the investigation. This scenario underscores the broader implications of trade policies and retaliatory measures in a globalized economy.
