Less than a week after the announcement of the introduction of provisional duties by the European Commission on the import of Chinese electric cars, the expected reaction from Beijing arrives. China launches an anti-dumping investigation into imports of pork and pork products from the European Union, in response to a request “formally submitted by the China Animal Husbandry Association on behalf of the domestic pig industry”. This is what the Ministry of Commerce reported in a note on 17 June, according to which Brussels has 20 days to present “opinions” on the matter, i.e. until 6 July. Two days after the entry into force of European duties of up to 38 percent on the import of latest generation Chinese vehicles, because they were accused of enjoying state subsidies.
Chinese electric cars could cost up to 38% more
It is clear that Beijing is adopting the carrot and stick strategy. If on the one hand he warns Brussels by warning that tariffs on electric vehicles made in China “would damage the interests of Europe” and would distance the Old Continent from the objectives of the energy transition, on the other hand he uses the commercial and diplomatic weapon to strike economically the European Union. As already done in the past with Lithuania, albeit for different reasons.
Lithuania is playing the role of David against (the) Goliath
How Beijing could act
But what does the measure of the People’s Republic entail? According to China’s Ministry of Commerce, the products under investigation include fresh, cold and frozen pork, pork offal, pork fat without lean meat, as well as pork intestines, bladders and stomachs. The import dumping investigation period runs from January 1 to December 31 last year, while the industrial damage assessment period covers four years from the first day of 2020 to the end of 2023. Starting from June 17, the investigation will last no more than a year, but could be extended for another six months. “Based on the evidence collected, the total production of pork and its by-products meets the requirements of the anti-dumping regulations of the People’s Republic” and is in line with the standards of the World Trade Organization, the Chinese ministry said in a statement.
As mentioned, Beijing’s reaction does not come as a bolt from the blue. Already in recent days, the Global Times had reported the news that the main Chinese industries were gathering evidence to request the opening of anti-dumping investigations on some dairy products and pork from the European Union. Commenting on the news, a spokesperson for the Ministry of Commerce said that Chinese industries “have the right to request the initiation of subsidy and anti-dumping investigations which the relevant authorities will investigate in accordance with the law.”
The fear of a trade war between China and the EU
While hope increases that the two blocs will find an agreement to remove the specter of a trade war, there are those who raise the bar. In a recent interview with the Global Times, Liu Bin, head of the China Automotive Technology & Research Center, suggested targeting imports of cars with large-displacement engines, a move that would have a major impact on imports of European cars. Currently, the tariff on car imports from Europe is 15 percent, but the fear is that Beijing will now choose to apply a 25 percent tariff on the most powerful cars.
The Chinese market, the largest in the world, is crucial for European car brands such as Mercedes or BMW, which would suffer a heavy backlash in the event of presumable retaliation. It is no coincidence that Germany has so far opposed the introduction of these measures, unlike France, which is more inclined to guarantee protection to the national automotive sector. Precisely for this reason, in January China launched an anti-dumping investigation into brandy imported from the Old Continent and France, probably to increase pressure on Paris, accused of having pushed the Commission’s investigation into electric vehicles made in China.
Germany wants to stop tariffs on Chinese electric cars
Brussels’ decision follows a similar one adopted a few weeks ago by Washington but with different implications. While Chinese electric cars are almost absent from the US market, they have a stronger presence in Europe: last year the value of the European Union’s imports of electric cars from China amounted to $11.5 billion, compared to just $1.6 billion in 2020, according to data from the think tank Rhodium Group.
Why the United States quadruples tariffs on Chinese electric car imports
The dialogue is therefore open. China’s response to the Commission’s decision to introduce tariffs on electric vehicles could spark intense negotiations between Beijing and Brussels aimed at averting a damaging trade war. At least that’s the hope.
