According to the state-backed Global Times, Chinese companies have formally requested an anti-dumping investigation against pork imports from the European Union, intensifying tensions following the bloc’s imposition of anti-subsidy charges on Chinese-made electric vehicles.

After Brussels imposed tariffs of up to 38.1% on electric vehicles (EVs) built in China to protect its auto sector from competition, the decision has opened a new front in bilateral tensions in one of the world’s most important commercial ties.

Customs statistics indicated that in 2023, China imported $6 billion worth of pork, including offal, with the EU accounting for almost half of the total.

The Global Times story, which was published on X, was vague on the specific pig items that would be the focus of the planned anti-dumping investigation.

The article mentioned a “business insider” as the source of the information but did not name any specific firms.

Chinese customers are fond of pig parts including feet, ears, and offal, which are generally unpopular in Europe. This represents a significant and profitable market for Europe.

“A lot of the meat imports from Europe are not muscle meat,” remarked a livestock analyst who asked to remain anonymous because the subject was so delicate. The expert said, “If offal is the target, China will have to import more offal from other countries where it is not consumed in the local market.”

Global food industries are terrified that the EU may take retaliatory action against Chinese-made electric vehicles (EVs), after its announcement this week.

On Friday, the Nasdaq just managed to close at a record high for the fifth time in as many days, thanks to increases in tech-related sectors.

China has a history of focusing trade disputes with other nations on food goods. Beijing has this strategy “because farmers losing out on China’s giant market has immediate repercussions for elected officials,” according to Even Pay, an agriculture specialist with the Beijing-based consultancy Trivium China.

China’s main pork suppliers in the previous year were Spain, Brazil, and the US. Denmark, the Netherlands, and France are other important suppliers.

According to Spain’s pig producers group Interporc, “the trust that our companies have earned among Chinese operators as serious, loyal and rigorous partners” and food safety account for the country’s top spot as a supplier to China.

According to its vice president, Thierry Meyer, the French industry organisation Inaporc was waiting to hear if an investigation would be opened, stating that “it’s very hard to do without the Chinese market.”

Trade losses with China have the potential to negatively impact the European market, similar to the 2020 epidemic of African swine fever that prevented Germany from exporting to China and resulted in a surplus of supplies in Europe.

In a probe launched in January, Beijing had previously singled out brandy; this was seen as a reprisal for France’s backing of the EU’s inquiry into electric vehicles (EVs) manufactured in China.

According to Chim Lee, senior China expert at the Economist Intelligence Unit, pork may also be a means of applying pressure to other EU nations while protecting Germany, which is hesitant to penalise Chinese EVs.

“Spain and France, which are major pork suppliers, were pro-tariffs,” he stated.

China’s commerce ministry said on Thursday that Chinese companies have the option to apply to start anti-dumping and anti-subsidy investigations into imports of European pork and dairy products.

The Global Times tabloid revealed last week that Chinese corporations want to request anti-subsidy investigations into EU dairy imports, which may harm important suppliers including the Netherlands, France, and Germany.

Regarding possible Chinese inquiries into EU pork and dairy imports, the European Commission responded to Reuters via email with the following statement: “The Chinese government can request a dispute settlement at the World Trade Organisation without needing to resort to retaliation.”

While visiting New Zealand on Friday, Chinese Premier Li Qiang informed companies that he believes there is a growing market for premium products such dairy, health products, beef, and lamb.

According to official media Xinhua, Li has promised to further increase market access and establish a business climate focused on the market while on the trip.

China said on Thursday that, in the aftermath of the EU tariff decision, which is set to go into effect in July, it will take “all necessary measures” to protect its interests.

China, along with European and Chinese automakers, strongly criticised the EV tariffs. According to industry sources, both parties have good incentive to reach an agreement in the next months, as the EU procedure permits reconsideration.

(Adapted from EconomicTimes.com)

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