China Launches Tit-for-Tat Probe Into Dairy Imports From EU

A customer picks up a cheese imported from Europe at a supermarket in Beijing on Aug. 21, 2024. Pedro Pardo/AFP via Getty Images

The Chinese regime on Aug. 21 opened an anti-dumping investigation on dairy products imported from the European Union, the latest response to the EU’s tariff proposals and fueling trade tensions between Beijing and the 27-nation bloc.

The investigation into imported dairy products that include fresh and processed cheeses and certain milk and cream products from the EU starts on Aug. 21, China’s Ministry of Commerce said in a statement. The investigation is expected to conclude in a year but can be extended for another six months, the ministry added.

Two state-backed industry groups, the Dairy Association of China and China Dairy Industry Association, formally submitted the request for an investigation into dairy products imported from the EU on July 29, the ministry said.

A total of 20 subsidy projects applied to various EU countries will be examined. Member states listed by the ministry are Austria, Belgium, Croatia, the Czech Republic, Finland, Italy, Ireland, and Romania.

In response, the European Commission, the EU’s executive arm, said it “took note” of China’s new probe.

“We will now analyse the application and follow the proceeding very closely” in coordination with the EU industry and member states, the Commission’s trade spokesperson, Olof Gill, said in a statement issued shortly after Beijing’s announcement.

“The Commission will firmly defend the interests of the EU dairy industry and the Common Agricultural Policy, and intervene as appropriate to ensure that the investigation fully complies with relevant [World Trade Organization] rules.”

The decision announced by China’s commerce ministry came just a day after the EU indicated that it intends to place a tariff of up to 36.6 percent on electric vehicles (EVs) shipped from China.

The extra duties, according to Brussels, are necessary to level the playing field because the substantial subsidies provided by the communist regime have given its homegrown EV producers an unfair trade advantage and threatened to hurt the EU market by artificially driving down EV prices.

The EU’s ongoing anti-subsidy investigation into China-made EVs is set to be completed in two months. The proposed tariffs could then become the EU’s definitive duties, which typically remain in effect for five years, if the majority of the bloc’s 27 member states support the plan in October’s vote.

Sun Kuo-hsiang, a professor of international relations at Nanhua University in Taiwan, interpreted Beijing’s new probe as an “attempt to exert pressure on the EU” amid Brussels’s ongoing anti-subsidy probe of China-made EVs.

The Chinese communist regime considers the EV industry a crucial strategic sector and offers substantial state subsidies and supportive policies to carmakers to bolster their growth, Sun told The Epoch Times.

“If the countervailing duties proposed by the EU are adopted, it could diminish China’s influence in the global EV market while exerting more political and economic strain on the Chinese government,” he said.

Electric cars for export waiting to be loaded on the "BYD Explorer NO.1," a domestically manufactured vessel intended to export Chinese automobiles, at Yantai port, in eastern China's Shandong Province, on Jan. 10, 2024. STR/AFP via Getty Images

The latest trade investigation into imports of dairy products came less than two months after Beijing initiated a similar investigation into the EU’s pork. China is also looking into brandy imported from the EU, with French cognac as the main target.

EU–China Trade War ‘Unavoidable’

Josep Borrell, the EU’s top diplomat, has cautioned that a trade war with Beijing may be unavoidable, even though Brussels has no interest in that scenario.

“We mustn’t be naive and we have no interest to get into a trade war“ with China, but ”maybe it’s unavoidable,” Borrell said at a seminar in Spain on Aug. 20. “It’s also in the logic of things.”

As the United States takes trade measures against the flood of cheap China-made EVs, Borrell said he believes Chinese producers will then shift their focus to EU markets.

He said of the United States: “They don’t ask us when they ban the import of Chinese cars. They’re not going to ask us where those Chinese cars are going if they’re not going to the United States.

“I am sure they will go to the European market, and this is also generating a competitiveness issue with our industry.”

Luo Ya contributed to this report.