BEIJING (AP) — European milk and cheese producers have become the latest target of a smoldering trade war with China.
China’s Ministry of Commerce said Wednesday it would launch an investigation into subsidies from the European Union and EU member states for dairy products, which could lead to tariffs on dairy exports to China.
The announcement came a day after the EU published a draft decision to finalise tariffs on electric vehicles produced in China, following provisional rates announced last month. The tariffs have been rejected by the Chinese government and automakers and threaten to derail the industry’s efforts to go global.
The dairy research will cover a range of products including fresh and processed cheese, blue cheese and milk and cream with a fat content of more than 10%, a statement from the Commence Ministry said. It will look at subsidies under the EU’s Common Agricultural Policy and those of eight European Union countries, including Italy, Finland and Croatia.
The Department of Commerce has previously opened an investigation into European brandy and export of pork at various stages of the EU investigation into Chinese subsidies for electric vehicles. The tit-for-tat investigations have raised fears that a full-fledged trade war could gradually develop.
“Unfortunately, the use of trade defence instruments by one government is increasingly met with an apparent in-kind response from the recipient government,” the European Union Chamber of Commerce in China said in a statement.
China has also filed a request a complaint to the World Trade Organization after the EU announced provisional tariffs on electric vehicles made in China. The EU Commission said Tuesday it is confident that its investigation and provisional tariffs comply with WTO rules.
The EU’s draft decision on final EV tariffs made mostly minor changes to the preliminary rates. Cars exported by BYD, China’s largest EV maker, would face a 17% tariff, while those from Shanghai-based SAIC Motor would face the highest rate of 36.3%. Tesla, which exports cars from China, was hit with a 9% tariff “at this stage” after it requested an investigation into specific subsidies it had received, the EU commission said.
The tariffs are subject to approval by EU member states. A final decision must be taken in early November, four months after the provisional tariffs take effect on 5 July.
