China-EU trade war intensifies, Beijing probes European subsidies on dairy imports

Beijing on Wednesday launched a probe into EU subsidies of some dairy products imported into China, the day after the bloc said it planned to impose five-year import duties of up to 36 percent on Chinese electric vehicles.

The investigation, which marks the latest barb in a trade standoff between the two, will cover a range of items including fresh cheese and curd, blue cheese, and some milk and cream, Beijing’s commerce ministry said.

“The Ministry of Commerce has decided to initiate an anti-subsidy investigation on imported relevant dairy products originating in the European Union from August 21, 2024,” the ministry said in a statement on its website.

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Officials said they had received an application from the Dairy Association of China for an anti-subsidy probe into European products on July 29, and held consultations with the European Union on August 14.

Beijing said the investigation would cover EU subsidy schemes implemented in the year up to the end of March 2024, and damages to China’s domestic industry between the start of 2020 and the end of March this year.

The probe takes aim at major pillars of the bloc’s setup including the common agricultural policy as well as national subsidy plans in Ireland, Austria, Belgium, Italy, Croatia, Finland, Romania and the Czech Republic.

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It will last one year but may be extended for up to six months “under special circumstances”, the ministry said.

The news comes a day after the European Commission said it planned to impose the five-year import duties on Chinese EVs, unless Beijing can offer an alternative solution to a damaging trade row over state subsidies.

Brussels last month hit EVs imported from China with hefty provisional tariffs – on top of current duties of 10 percent – after an anti-subsidy probe found they were unfairly undermining European rivals.

Beijing on Wednesday slammed that as a “typical protectionist and politically driven act”.

“It ignores objective facts, disregards (World Trade Organization) rules, goes against the historical trend, damages the EU’s green transformation process and global efforts to address climate change,” foreign ministry spokeswoman Mao Ning said.

He added that the European Union “will only harm itself” with the imposition of tariffs.

The latest move comes amid a number of other pending Chinese inquiries into EU trade practices, including an anti-dumping investigation into pork imports launched in June.

Beijing also last month kicked off a formal probe into EU practices after the bloc launched an anti-subsidy investigation into a range of Chinese transport and green energy firms.