Chinese authorities have initiated an anti-subsidy investigation into European dairy imports, marking the latest escalation in trade tensions between Beijing and Brussels. The announcement from China’s commerce ministry follows the European Commission’s recent decision to impose revised duties on Chinese electric vehicles, which Brussels views as unfairly cheap and a threat to European jobs.
China’s investigation, prompted by a complaint from its dairy industry on July 29, targets 20 EU subsidy programs that support the production of milk, cream, and cheese across eight European countries. These subsidies include dairy storage, young farmers’ allowances, and other agricultural supports under the EU’s common agricultural policy. The countries under scrutiny include Ireland, Austria, Belgium, Italy, Croatia, Finland, Romania, and the Czech Republic, with Ireland being the largest dairy exporter to China.
Conor Mulvihill, director of Dairy Industry Ireland, acknowledged the potential for trade disruption but emphasized that Irish dairy exports are well-diversified. The investigation, he noted, is focused on a specific subsector of the dairy market, including various types of cheese.
The European Union Chamber of Commerce in China stated that this investigation was expected, given the EU’s recent trade measures against Chinese electric vehicles. In response, Beijing has also launched competition inquiries into European imports of pork and cognac.
The European Commission has committed to defending the interests of the EU dairy industry and ensuring that China’s investigation adheres to World Trade Organization (WTO) rules. Meanwhile, the EU’s top diplomat, Josep Borrell, has warned that a trade war with China may be unavoidable, despite efforts to avoid a “systemic confrontation.”
As the situation develops, Chinese carmakers could face tariffs of up to 36.3% on electric vehicles exported to the EU if they do not cooperate with the ongoing investigation. Additionally, the European Commission has launched separate anti-dumping inquiries into Chinese-made solar panels and wind turbines.
