China Launches Anti-Dumping Probe on EU Dairy Products Amid Trade Tensions

China Launches Anti-Dumping Investigation on EU Dairy Products

In response to the European Union’s (EU) proposed tariffs on China-made electric vehicles (EVs), China’s commerce ministry has initiated an anti-dumping investigation on dairy products imported from the EU. This move further escalates trade tensions between China and the 27-nation bloc. The investigation, which includes fresh and processed cheeses, milk, and cream products, will begin on August 21 and is expected to conclude in a year. The Ministry of Commerce stated that the investigation can be extended for an additional six months if necessary. The request for the investigation was submitted by two state-backed industry groups, the Dairy Association of China and China Dairy Industry Association, on July 29.

The investigation will examine 20 subsidy projects applied to various EU countries, including Austria, Belgium, Croatia, the Czech Republic, Finland, Italy, Ireland, and Romania. The European Commission, the EU’s executive arm, has acknowledged China’s new probe and stated that it will closely analyze the application. The Commission’s trade spokesperson, Olof Gill, emphasized that they will defend the interests of the EU dairy industry and ensure that the investigation complies with relevant World Trade Organization rules.

China’s Response to EU Tariffs on China-Made EVs

China’s decision to initiate the anti-dumping investigation on dairy products came just a day after the EU announced its intention to impose tariffs of up to 36.6 percent on China-made EVs. The EU argues that these tariffs are necessary to address the unfair trade advantage Chinese EV producers have due to substantial subsidies provided by the Chinese regime. The EU’s ongoing anti-subsidy investigation on China-made EVs is expected to be completed in two months, after which the proposed tariffs may become definitive duties if supported by the majority of the EU member states in October’s vote.

Sun Kuo-hsiang, a professor of international relations at Nanhua University in Taiwan, believes that China’s new probe on dairy products is an attempt to exert pressure on the EU amid the ongoing anti-subsidy investigation on China-made EVs. The Chinese government sees the EV industry as a strategically important sector and provides significant state subsidies and supportive policies to domestic carmakers. If the EU’s countervailing duties are adopted, it could diminish China’s influence in the global EV market and increase political and economic strain on the Chinese government.

China’s Ongoing Trade Investigations into EU Imports

This investigation into dairy products is not the first time China has initiated a trade probe against EU imports. Less than two months ago, Beijing initiated a similar investigation into EU pork. Additionally, China is looking into brandy imported from the EU, with French cognac being the main target. These investigations highlight the growing trade tensions between China and the EU.

EU-China Trade War could be Unavoidable

Josep Borrell, the EU’s top diplomat, has expressed concerns that a trade war with China may be unavoidable, despite the EU’s lack of interest in such a scenario. Borrell stated that the United States’ trade measures against cheap China-made EVs might lead Chinese producers to shift their focus to the EU market. He highlighted the competitiveness issue this could create for the EU industry. Borrell emphasized the need for caution and acknowledged that a trade war may be in the logic of things.