China has launched an anti-dumping investigation into certain pork products imported from the European Union, a move widely seen as retaliation for the EU’s imposition of steep tariffs on electric vehicles (EVs) imported from China.
This development marks an escalation in trade tensions between the two economic giants, as they leverage regulatory tools to protect their domestic industries.
Scope of the investigation
The investigation will assess the import dumping of pork products during the period between January 1 and December 31 of last year.
Additionally, the probe will evaluate industrial damage over a four-year period, from the first day of 2020 to the last day of 2023, according to a statement from China’s Ministry of Commerce.
The probe follows an application filed by the China Animal Agriculture Association (CAAA) on June 6, representing the interests of the domestic pork industry.
The CAAA has accused the EU of dumping pork products in China at low prices, adversely affecting local producers and related breeding industries.
Scale of pork consumption and imports in China
China, the world’s largest pork consumer, imported pork worth $6 billion in 2023, with the EU accounting for more than half of these imports, according to customs data.
Within the EU, Spain is the largest exporter of pork to China, with shipments totaling $1.5 billion, followed by the Netherlands and Denmark.
Claims made by the CAAA
The CAAA has argued that the EU’s pork exports to China have been boosted by the bloc’s consumption habits, such as not eating pork offal, and substantial subsidies.
The association also cited “massive” overcapacity in the EU’s pork production as a factor driving low prices and high export volumes to China.
These factors, the CAAA claims, have undermined the competitiveness of China’s domestic pork industry and harmed the interests of local farmers.
EU Chamber of Commerce’s response
The European Union Chamber of Commerce in China described the investigation as unsurprising, noting that it is not uncommon for one jurisdiction’s probe to trigger a retaliatory investigation.
“The European Chamber expects to see a fact-based probe with a view to ensure such principles for all market participants,” it said in a statement. “The Chamber encourages both sides to take action to depoliticize the business environment and find ways to address the underlying causes.”
Tariffs imposed by the EU on Chinese EVs
The backdrop to this investigation includes the EU’s announcement last week that it would impose tariffs of up to 38% on cars produced in China, effective from July 4, if ongoing talks with Chinese authorities do not yield a satisfactory resolution.
This decision followed an October probe into battery electric vehicles (BEVs) by the European Commission, which found that global markets were being flooded with cheaper EVs, whose prices were kept artificially low due to “huge state subsidies.”
This surge in imports has significantly impacted the European auto market.
Among the affected companies, BYD – the world’s largest EV manufacturer – will face a 17% tariff, Geely will face a 20% tariff, and SAIC will be subjected to the highest tariff of 38.1%.
Implications and future outlook
The ongoing trade tensions between China and the EU underscore the complexities of global trade relations, particularly as both regions grapple with protecting their domestic industries while adhering to international trade regulations.
The outcome of China’s investigation into EU pork imports and the potential implementation of tariffs on Chinese EVs will likely have significant implications for the respective industries and broader trade dynamics.
Both sides will need to navigate these disputes carefully to avoid further escalation and to find mutually beneficial solutions.
The push for depoliticizing the business environment, as suggested by the European Chamber of Commerce in China, highlights the need for a more collaborative approach to resolving trade conflicts.
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