China launches anti-subsidy investigation into EU dairy products – Euronews.com

This article was originally published in English

The investigation is seen as a response to EU tariffs on electric vehicles imported from China. The EU exports around 2 billion euros of dairy products to China each year and analysts say Beijing could put pressure on the agricultural sector with its measures.

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China has launched an anti-subsidy investigation into dairy products imported from the European Union (EU), the Chinese Ministry of Commerce said in a statement on Wednesday. The move is seen as a Sign of escalating trade conflict between Brussels and Beijing.

The investigation – requested by two state-backed industrial groups – was discussed with the European Commission on August 14, according to the statement. The investigation should be completed within 12 monthsbut could be extended for another six.

The investigation will focus on EU subsidies for the production of fresh and processed cheese, blue cheese, and other cheese, milk and cream-based products. According to the Chinese ministry, 20 grant programmes in eight Member States to be investigated: Austria, Belgium, Croatia, Finland, Ireland, Italy, Czech Republic and Romania. These include some grant programmes from the Common Agricultural Policy (CAP) of the EU.

The move comes less than 24 hours after the EU executive announced its intention to impose Final tariffs of up to 36.3% on imports of battery electric vehicles (BEVs) made in China, following a nine-month anti-subsidy investigation.

It was discovered that Beijing was injecting subsidies into the entire value chain of BEVs, which gave Chinese companies an unfair advantage and threatened to strangle the EU’s domestic industry by artificially deflating vehicle prices.

The EU is also investigating the potentially harmful impact of Chinese subsidies to wind turbine and solar panel producers in the community industry.

Beijing has already opened Anti-dumping investigations into pork, liquor and chemicals of the EU, as well as on public procurement of medical devices.

Commission spokesman Olof Gill “took note” of the Chinese government’s decision in a statement shared with ‘Euronews’. “The Commission will now analyse the request and closely follow the procedure, in coordination with industry and EU Member States,” Gill added.

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

Borrell warns against “systematic confrontation”

On Tuesday, the High Representative for Foreign Policy of the EU, Joseph Borrellsaid the bloc must avoid a “systematic confrontation” with China as trade tensions between the two sides threaten to boil over.

“Our political systems are different, but that should not lead to a systemic and permanent rivalry“, declared Borrell during the course ‘Quo Vadis Europa?’, held at the Menendez Pelayo International Universityin the Spanish city of Santander. “That doesn’t interest us.”

But Borrell, who will step down this autumn after five years at the helm of EU diplomacy, also warned that A trade war between China and other world powers could be inevitable“We have no interest in leading the world into a trade war. However, it is possible that this trade war (…) is inevitable,” he explained. “It is in the logic of things.”

He also indicated that Europe’s interests will not always coincide with those of the US.and urged the bloc to be more willing to do things its way. “When they (the US) take trade measures against China – because they do – they don’t ask us whether it’s good for us (Europe) or not,” Borrell said.

“When they ban the import of Chinese cars, or put up deterrent tariffs, they don’t ask themselves where those Chinese cars that won’t go to the US will go. Where will they go? What other market can they go to? Well, of course, to the European market, and This causes a competitiveness problem for our industry.“, he noted.

Additional sources • Enrique Barrueco (Voiceover)