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BRUSSELS — EU leaders may be crying over spilt milk this week after the Chinese government launched an anti-subsidy investigation into imports of EU dairy on Wednesday, the latest salvo in an escalating tit-for-trade trade war between Brussels and Beijing.
Coming a day after the European Commission unveiled its final draft duties on Chinese electric vehicles (EVs), Beijing’s probe will cover almost all shipments of dairy from April 2023 to the end of March 2024, with a longer period for industrial damages from January 2020.
The products include “fresh cheese (including whey cheese) and curd, processed cheese (whether or not ground or pulverized), blue cheese and … milk and cream (with a fat content of more than 10% by weight) that is not concentrated,”the Ministry of Commerce said in a statement.
The move is widely seen as political payback for the EU’s investigation into Chinese EVs and follows earlier Chinese probes into imports of EU pork (announced on June 17 and worth nearly €3 billion last year) and brandies (on January 5 and worth €1.6 billion). In June, Beijing had threatened inquiries into dairy (€1.8 billion) and wine (€1.2 billion) as well.
The brandy investigation hit France, the most vocal promoter of the Commission’s EV probe, which accounts for 99 percent of EU brandy exports to China. The pork probe upped the stakes, gutting Spain — another China critic — which supplies two-fifths of EU pig meat to Beijing, but also neutral Denmark (30 percent) and the Netherlands (15 percent).
Dairy is another discriminating target, with France getting sliced again. The dairy products under investigation account for over €500 million in annual value, of which French exports amount to €190 million, followed by Italy (€55 million), Denmark (€50 million) and the Netherlands (€45 million), according to industry figures seen by POLITICO.
Of the 20 dairy subsidy programs Beijing will be investigating, seven fall under the Common Agricultural Policy (CAP), while 13 work at the national level in Austria, the Belgian region of Flanders, Croatia, Czechia, Finland, Italy, Ireland and Romania.
A spokesperson for the European Commission acknowledged Beijing’s decision and said that the Berlaymont would follow proceedings “very closely” alongside affected EU countries.
“The Commission will firmly defend the interests of the EU dairy industry and the Common Agricultural Policy, and intervene as appropriate to ensure that the investigation fully complies with relevant WTO rules,” they said in a statement.
The EU Chamber of Commerce in China commented that “[r]egrettably, the use of trade defense instruments by one government is increasingly being responded to seemingly in kind by the recipient government” and noted it “should not be considered a surprise.”
This story has been updated to clarify details of EU dairy exports to China and make clear that it is an anti-subsidy investigation. Judith Chetrit, Antonia Zimmermann and Camille Gijs contributed reporting.
