China has launched an anti-subsidy investigation into dairy imports from eight EU countries, escalating trade tensions. The probe will examine subsidies supporting dairy production in countries like Ireland, Italy, and Finland, focusing on products such as cheese and curd. This move follows the European Commission’s tariffs on Chinese electric vehicles, deepening the trade rift between Beijing and Brussels.
In the latest escalation of trade disputes between China and the European Union (EU), Chinese authorities have initiated an anti-subsidy investigation into dairy imports from eight EU countries. The probe was triggered by a complaint from China’s dairy industry on July 29, following consultations with the EU on August 14. This move marks a new chapter in the growing hostility between Beijing and Brussels, already strained over trade issues in other sectors.
The investigation, announced by China’s Ministry of Commerce, will scrutinize 20 subsidy programs supporting the production of milk, cream, and cheese. These programs include subsidies for dairy storage, young farmers, supplementary income, and other schemes under the EU’s Common Agricultural Policy. The countries targeted by this investigation are Ireland, Austria, Belgium, Italy, Croatia, Finland, Romania, and the Czech Republic.
Of these, Ireland stands out as the largest dairy exporter to China, with exports valued at approximately $465 million in 2023. The investigation will focus specifically on certain dairy products, including fresh and processed cheese, blue cheese, and curd. Conor Mulvihill, the director of Dairy Industry Ireland, acknowledged the potential disruption but emphasized the resilience of the Irish dairy sector, which exports to multiple countries.
This development comes a day after the European Commission imposed revised duties on Chinese electric vehicles, accusing China of providing extensive subsidies to its electric car manufacturers. In response, Beijing has not only launched the dairy investigation but has also initiated inquiries into European imports of pork and cognac.
The European Commission has vowed to defend the interests of the EU dairy industry, stating that it will closely monitor the investigation to ensure compliance with World Trade Organization (WTO) rules. As trade tensions rise, the prospect of a broader trade war looms, with EU officials also conducting anti-dumping investigations into Chinese-made solar panels and wind turbines.
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