China targets Europe’s farmers, and not its automakers, in response to EU tariffs on electric cars

China launched an investigation into European Union pork imports after the EU announced plans to impose tariffs on China-made electric vehicles. File
| Photo Credit: Reuters

The Chinese government is taking aim at European farmers, instead of German automakers, by launching an investigation into European Union pork imports, just days after the EU said it plans to impose provisional tariffs on China-made electric vehicles.

The Commerce Ministry didn’t mention the EV tariffs when it announced on June 17 that it is opening an anti-dumping investigation into pork from Europe, but the move is widely seen as a response to the EU move on electric cars. It also gives China a bargaining chip in any trade negotiations.

Also read: EU ready for ‘tough decisions to protect economy’, von der Leyen tells China

Tit for tat?

China could have slapped a 25% duty on imports of petrol-powered vehicles with large engines in the name of combating climate change, a step that would have hit Mercedes and BMW hard. In choosing not to do so, at least for now, the government may be acknowledging the public opposition of the German auto industry to the EU tariffs, as well as its sizeable production in China.

The Chinese market is a major one for German automakers, and the head of the country’s auto association, the VDA, described the June 12 EU tariff announcement as a further step away from global cooperation. “The risk of a global trade conflict is rising further as a result of this measure,” Hildegard Müller said in a statement.

The investigation of EU pork imports will cover various products, including fresh and frozen pork meat, intestines and other internal organs. The announcement says it is expected to take one year, with a possible six-month extension.

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Olof Gill, a spokesperson on trade for the European Commission, told journalists in Brussels that EU farm subsidies “are strictly in line with our WTO obligations” and that the Commission would follow the investigation very closely and intervene as needed to ensure that the Chinese probe complies with World Trade Organisation rules.

Chinese officials have said the EU investigation into subsidies for electric vehicle production in China is “typical protectionist behaviour” that disregards WTO rules.

The EU plans to impose provisional tariffs of 17.4% to 38.1% on EVs from China for four months starting July 4. They would apply to vehicles exported to Europe by Chinese and foreign brands, including Tesla.