On Thursday, November 6th, the European Commission launched an anti-subsidy investigation into Chinese-made tires used in cars, light trucks, and buses. The reason cited was that there is ample evidence to show that Chinese manufacturers have received subsidies from the government, resulting in unfair competition with EU products.
According to Reuters, this anti-subsidy investigation builds upon a similar anti-dumping review of the same products initiated by the EU enforcement agency in May. It is one of 17 new investigations conducted by the European Commission against Chinese products, aimed at curbing the surge in import volume of these products. The new investigation could potentially escalate tensions in bilateral relations.
The “Alliance Against Unfair Tire Imports” formed by EU manufacturers stated in their complaint that since 2021, the import volume of Chinese tires has increased by 51%, with prices 30% to 65% lower than those of EU manufacturers, severely impacting the latter’s sales.
The alliance also pointed out that subsidies received by Chinese manufacturers include grants, preferential loans, tax exemptions, as well as land and electricity provided at below-market prices.
According to relevant legal provisions, the European Commission must conclude the investigation within 13 months and can impose temporary tariffs on the investigated products within 9 months.
Over the past three years, there have been unprecedented changes in trade relations between China and the EU. The number of anti-dumping and anti-subsidy investigations on Chinese products by the EU has been increasing, and the range of products subject to restrictive measures has expanded to cover various sectors such as steel, aluminum profiles, ceramics, chemicals, and electric vehicles, with tariff rates ranging from 13% to 90%.
In an environment where high tariffs and market barriers coexist, Chinese export companies are utilizing transshipment trade to circumvent restrictions. For instance, they are using third countries like Malaysia, Vietnam, the UAE, and Turkey as transshipment hubs to evade the new tariffs and restrictions imposed by the EU.