China launches probe into European dairy exports amid escalating trade tensions

European dairy producers are now the focus of a trade conflict with China, with the Chinese Commerce Ministry stating it will investigate subsidies provided by the European Union and certain EU member countries for dairy products. This investigation could potentially result in tariffs on the export of these products to China. The Commerce Ministry’s notice includes products such as fresh and processed cheese, blue cheese, and milk and cream with over 10% fat content. The investigation will assess subsidies from the EU’s Common Agricultural Policy and from countries like Italy, Finland, and Croatia.

Following the European Union’s draft decision to impose tariffs on electric vehicles manufactured in China, tensions in the trade war have escalated. China and automakers have criticized these tariffs, fearing negative impacts on the industry’s global expansion efforts. This move by the EU follows provisional tariffs announced last month.

Previously, the Commerce Ministry had initiated investigations into European brandy and pork exports amidst the EU’s inquiry into Chinese subsidies for electric vehicles. The ongoing back-and-forth investigations have raised concerns about the potential escalation of a comprehensive trade war.

In response to the provisional tariffs on China-made electric vehicles, China lodged a complaint with the World Trade Organization. The EU Commission expressed confidence that their investigations and interim tariffs are in accordance with WTO regulations.

The draft decision on finalizing tariffs for electric vehicles made minor adjustments to the provisional rates. Notably, there will be a 17% tariff on BYD’s exports, while SAIC Motor’s vehicles will face a 36.3% tariff. Tesla, which also exports autos from China, will be subject to a 9% tariff as per their request for an examination into specific subsidies they received. The final approval for these tariffs rests with the EU member states, with a decision expected by early November, four months after the provisional tariffs took effect on July 5.