The Chinese government announced on Monday (June 17) that it is launching an anti-dumping investigation into pork and pork products imported from the European Union. Experts believe that this move is politically motivated and is seen as a retaliatory act by China against the EU’s tariffs on Chinese electric cars. The EU responded on the same day, stating that they are not worried about Beijing’s investigation and will intervene as necessary.
Pork is the most popular meat in China, and the EU is the second largest producer of pork after China.
The Chinese Ministry of Commerce announced on Monday that it has decided to initiate an anti-dumping investigation on imported pork and pork products originating from the EU starting from June 17, 2024. The investigation is expected to conclude within a year, with a possible extension of another six months if needed.
According to EU customs data, the EU exported pork worth over 25 billion euros (27 billion US dollars) to China last year, including offal, with nearly half of it coming from Spain. Netherlands, Denmark, and France also had significant pork exports.
The EU stated that they are not concerned about the investigation by China. EU Commission spokesman Olof Gill denied any dumping issues with EU pork products and stated that the EU will closely monitor China’s investigation on pork products and intervene as necessary to ensure compliance with WTO rules.
“We are not worried,” Gill said, adding that all subsidies provided under the EU’s Common Agricultural Policy “strictly comply” with WTO obligations.
The Chairman of the EU Chamber of Commerce in China, Jens Eskelund, was quoted by Reuters as saying, “Considering the EU’s investigation into electric cars, this (China’s anti-dumping investigation on EU pork) is not surprising.”
“A free and open market relies on rules-based trade practices,” he added.
Last week, the EU announced additional tariffs ranging from 17.4% to 38.1% on electric cars produced in China, on top of the existing 10% tariff, bringing the total tariff rate close to 50%. This move aims to counter China’s unfair subsidy policies. Following this announcement, global food companies have been on high alert for retaliatory tariffs from China.
According to the Financial Times, Fredrik Erixon, the director of the European Centre for International Political Economy (ECIPE) in Brussels, stated, “This is a politically motivated retaliation. The EU pork industry is quite vulnerable, and China is a major export market.”
“This also hits France and the Netherlands. Both countries are in politically sensitive times, and China (the CCP) is aware of that,” he referred to the upcoming French elections.
In the past year, the EU has faced protests from farmers. Food producers have complained about declining incomes and stringent environmental requirements, blockading roads, intercepting trucks, and destroying imported products.
Niclas Poitiers, a researcher at Bruegel, a European think tank focused on economic policy, told Euractiv, “China’s intention is to retaliate against the EU’s anti-subsidy investigation into Chinese electric cars.”
“This move by China fits with past experiences of economic coercion, essentially attempting to achieve political goals through economic means,” Poitiers said. “Given the importance of agriculture in European politics,” the pork industry was chosen as a target by China.
Pork accounted for 17% of the EU’s agricultural exports to China last year.
It was widely anticipated before China announced the investigation into EU pork products that the Chinese government would take retaliatory actions to pressure EU officials not to impose final tariffs on electric cars imported from China. The EU must make a final decision on electric car tariffs by November, while temporary tariffs will take effect around July 4.
Policy advisor to COPA and COGECA, the EU Farmers’ Association, Ksenija Simovic, told Euractiv, “We are being retaliated against due to disputes in other sectors.”
While EU pork exports to China are significant, the trend has been declining in recent years due to the sluggish Chinese economy and a strong recovery in domestic pig stocks. Exports of pork to China decreased by as much as 23% in 2023 compared to 2022. In the first two months of 2024, EU pork exports to China have already decreased by 16% compared to the same period last year.
Earlier this year, Danish Crown A/S, Europe’s largest pork producer, announced plans to shift towards more consumer-oriented businesses, such as convenience foods in Europe, as their competitiveness in exporting to China has declined.
Spain’s Minister of Agriculture, Luis Planas, expressed confidence on Monday that there is “room for understanding and negotiation between the EU and China” to avoid a trade war. He added that the importance of exports to China has decreased, and new markets for EU pork have opened up.
This incident is expected to escalate tensions between the EU and China. Beijing has launched an anti-dumping investigation into brandy imported from the EU and may impose tariffs, impacting French Cognac producers.
The EU is also investigating support from the Chinese government to wind turbine companies and solar panel suppliers. The EU is concerned that China’s overcapacity in industry leads to the influx of cheap export products into the European market, harming the interests of European businesses.
In recent weeks, the EU has initiated anti-dumping investigations on some Chinese imported goods. A recent investigation included decorative paper imported from China.