The Chinese government has shifted its focus from German automakers to European farmers by initiating an investigation into European Union pork imports shortly after the EU announced plans for provisional tariffs on China-manufactured electric vehicles.
Although the Commerce Ministry did not directly reference the EV tariffs in its announcement on Monday regarding the anti-dumping investigation into European pork, many view this move as a response to the EU’s actions on electric cars. It also provides China with leverage in potential trade negotiations.
Chinese officials have criticized the EU’s investigation into subsidies for electric vehicle production in China as “typical protectionist behavior” that goes against WTO regulations. The EU intends to impose provisional tariffs ranging from 17.4 percent to 38.1 percent on Chinese EVs for a four-month period starting July 4, affecting vehicles exported to Europe by both Chinese and foreign brands, including Tesla.
In a contrasting move, China refrained from imposing a 25 percent duty on imports of gasoline-powered vehicles with large engines to combat climate change, a decision that would have significantly impacted Mercedes and BMW. This choice may reflect the government’s acknowledgement of the German auto industry’s opposition to the EU tariffs and its substantial production presence in China.
The Chinese market holds significant importance for German automakers, and the VDA, Germany’s auto association, expressed concerns over the EU tariff announcement as a step away from global collaboration. The potential for a global trade conflict grows with such measures, according to VDA head Hildegard Müller.
The close economic ties between Central and Eastern European nations and Europe’s automotive sector add further complexity to China’s considerations. Any tariffs imposed would have cascading effects on countries like Hungary and Slovakia, which maintain friendly relations with Beijing.
The investigation into EU pork imports will encompass various products, including fresh and frozen pork meat, intestines, and other internal organs. The process is expected to last one year, with a potential six-month extension, as stated in the announcement.
Olof Gill, a spokesperson for trade at the European Commission, emphasized that EU farm subsidies adhere to WTO regulations and pledged to monitor the Chinese probe closely to ensure compliance with international trade rules.
EU pork exports to China peaked at 7.4 billion euros in 2020 due to domestic pig farm losses from a swine disease outbreak, but have since declined to 2.5 billion euros in 2021, with Spain contributing nearly half of that total.
Amid concerns, Spanish Economy Minister Carlos Cuerpo stressed the importance of avoiding escalating trade tensions and mentioned the Spanish pork industry’s willingness to cooperate with Chinese authorities.
Spain’s Minister for Agriculture, Luis Planas, highlighted the potential for negotiation to prevent a trade conflict, echoing sentiments following the US tariffs on EU agricultural products in 2019 during the Airbus subsidy dispute.