Cheese imported from Europe at a supermarket in Beijing on August 21, 2024. | Photo credit: AP
European milk and cheese producers have become the latest target of the ongoing trade war with China.
The Chinese Commerce Ministry said on Wednesday (August 21, 2024) that it will launch an investigation into subsidies provided by the European Union and EU member countries for dairy products, which could lead to duties on their exports to China.
The announcement comes a day after the EU released a draft decision to finalise tariffs on electric vehicles manufactured in China, a follow-up to provisional tariffs announced last month. The tariffs have been condemned by the Chinese government and automakers and threaten to deal a blow to the industry’s efforts to go global.
The commencement ministry notice said the dairy probe would cover a range of products including fresh and processed cheese, blue cheese and milk and cream with more than 10% fat. It would also look at subsidies under the EU’s common agricultural policy as well as subsidies offered by eight EU countries including Italy, Finland and Croatia.
The commerce ministry had earlier launched probes into European brandy and pork exports at different stages of the EU investigation into Chinese subsidies for electric vehicles. The cross-border probes have raised fears that a full-blown trade war could slowly emerge.
“Unfortunately, the use of trade defence instruments by one government is being responded to with similar force by the receiving government,” the European Union Chamber of Commerce in China said in a statement.
China also filed a complaint with the World Trade Organization after the EU announced provisional tariffs on Chinese-made electric vehicles. The EU Commission said on Tuesday (August 20, 2024) that it is confident that its investigation and the provisional tariffs comply with WTO rules.
The EU’s final draft decision on EV tariffs makes mostly minor revisions to the provisional rates. Vehicles exported by BYD, China’s biggest EV maker, will face a 17% tariff, while vehicles exported by Shanghai-based SAIC Motor will face the highest tariff of 36.3%. The EU Commission said Tesla, a Chinese auto exporter, has been given a 9% tariff “at this stage” after it requested an investigation into specific subsidies it received.
The tariffs are subject to the approval of EU member countries. A final decision should be made by early November, four months after the July 5 effective date of the provisional tariffs.