Factbox: China’s Probes on EU Products Following EV Tariffs

By Nigel Hunt and Mei Mei Chu

BEIJING/LONDON – China has initiated an anti-subsidy investigation into imported dairy products from the European Union, intensifying tensions with the bloc just a day after Brussels released a revised draft decision regarding tariffs on electric vehicles produced in China.

Here are the key details regarding the investigation into EU dairy imports and other sectors currently under scrutiny.

DAIRY

On Wednesday, the Chinese commerce ministry announced an anti-subsidy investigation focusing on a range of dairy products including various types of cheeses, milks, and creams intended for human consumption. This inquiry was triggered by a complaint made by the Dairy Association of China and the China Dairy Industry Association on July 29, which represented the interests of the domestic dairy sector.

China’s investigation will scrutinize 20 subsidy schemes from 27 EU member states, with particular attention to those originating from Austria, Belgium, Croatia, Czech Republic, Finland, Italy, Ireland, and Romania. Notably, the EU was the second-largest supplier of dairy products to China, accounting for at least 36% of the total value of imports in 2023, second only to New Zealand. According to customs data, the EU exported dairy products worth 1.7 billion euros (approximately $1.84 billion) to China in 2023, a decrease from 2 billion euros in 2022.

PORK

Additionally, there is an ongoing anti-dumping investigation, initiated in June by China’s commerce ministry, which targets pork products meant for human consumption, including fresh, chilled, and frozen cuts, as well as pig intestines, bladders, and stomachs. This investigation also arose from a complaint lodged by the China Animal Husbandry Association representing the domestic pork industry.

If restrictions are enforced on EU pork imports, suppliers from South America, the U.S., and Russia could potentially benefit from increased market shares. The EU represented over half of the approximately $6 billion worth of pork imported by China in 2023, with Spain alone accounting for about a quarter of this total. The Netherlands and Denmark followed as the second and third largest exporters, with pork shipments valued at $620 million and $550 million, respectively.

BRANDY

On Thursday, the commerce ministry revealed that it would not impose provisional tariffs on brandy imported from the EU, despite findings that these products were sold below market prices in China. In January, Beijing began investigating if EU brandy producers were undercutting market rates, a situation that had already created concerns for cognac makers, particularly French brands like Remy and Pernod. The French cognac sector dominates brandy imports from the EU to China, and producers believe the investigation may be associated with broader trade disputes rather than being focused solely on the liquor market.

PLASTIC

In May, Beijing launched an anti-dumping investigation against POM copolymers, an engineering plastic imported from the EU, U.S., Japan, and Taiwan.