China has initiated an anti-subsidy investigation into dairy imports from the European Union, escalating trade tensions between the two parties. The probe, announced by China’s Ministry of Commerce, targets cheese, milk, and cream, and will examine 20 EU subsidy schemes in eight key countries.
The move comes on the heels of the EU’s revised proposed punitive tariffs on Chinese-made electric vehicles, which China strongly opposes. The EU adjusted the planned duty from 37.6% to 36.3%, but failed to eliminate the tariffs entirely, prompting China to take action.
The dairy investigation is the latest in a series of Chinese probes targeting EU agricultural products. China’s domestic dairy sector filed a complaint with the Ministry of Commerce, alleging that EU subsidies have harmed Chinese dairy producers.
The EU has responded, stating that it will “firmly defend the interests of the EU dairy industry and the Common Agricultural Policy” and ensure that the investigation complies with World Trade Organization regulations.
The probe has significant implications for EU dairy exporters, particularly Ireland, which is the largest exporter of dairy products to China. France is also affected, as it is China’s second-largest supplier of cream.
The trade tensions between China and the EU come as both parties navigate complex economic relationships. China relies on external demand to support its economy, making it unlikely to take an overly confrontational stance in trade matters.
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