China probes European pork prices after EU raises tariffs on its electric cars | CNN Business

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CNN
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Beijing has launched an investigation into pork prices from the European Union, targeting a major EU food export just days after Brussels raised tariffs on electric vehicles from China.

The move risks escalating tension in one of the world’s biggest trade relationships and will raise fears among EU exporters that Beijing could go after their goods to retaliate against temporary EV tariffs.

China’s Ministry of Commerce said on Monday that domestic agricultural producers had requested an anti-dumping investigation on pork and pork by-products from the EU and that a preliminary inspection had found sufficient grounds for an official investigation into whether their prices are artificially low.

He added that the investigation should be completed within a year, but could be extended by six months if necessary.

A rise in import tariffs could be very costly for European pork producers if it ends up hurting demand in China, the world’s biggest pork market and the main destination for EU pork exports. The EU is the second largest producer of pork after China.

According to EU customs data, the bloc exported more than 2.5 billion euros ($2.7 billion) of pork, including offal, to China last year. Almost half of these came from Spain, with the Netherlands, Denmark and France also exporting significant quantities.

Beijing has already launched an anti-dumping investigation into brandy imported from the EU and could impose tariffs that would hit French cognac producers. China may also target Europeans wine and luxury goods, according to analysts at Rhodium Group, a think tank.

Olof Gill, a spokesman for the European Commission, the EU’s executive arm, told reporters on Monday that the EU will follow the investigation into pork products “very closely” and “intervene as appropriate” to ensure the investigation is in accordance with the rules established by World Trade. Organization.

Responding to a question about the EU’s substantial agricultural subsidies, Gill added that the bloc was “not at all concerned” that the WTO might find in China’s favor. “Any subsidies… are strictly in line with our WTO obligations,” he said.

Beijing was widely expected to use targeted measures to dissuade EU officials from permanently approving higher tariffs on electric cars imported from China, a decision the EU must make by November. The temporary rates will take effect on July 4.

The European Commission announced last week that additional Tariffs of between 17.4% and 38.1% would apply to electric vehicles manufactured in China on top of the existing EU duty of 10%. This requires the highest overall rate to be close to 50%.

Beijing immediately denounced the move, which could hurt its ambitions to increase exports of electric vehicles and is likely to accelerate efforts by Chinese carmakers to set up factories in Europe.

Brussels is also investigating China’s state support for wind turbine companies and solar panel suppliers amid concerns that the country’s industrial overcapacity is flooding markets elsewhere. with cheap exports.

Xiaofei Xu and Maisie Linford contributed reporting.