After the European Union imposed swift tariffs against Chinese EVs, Beijing began a strong retaliation.
China opened an investigation probe over the European Union’s subsidies to its pork and pork-related products. The investigation, starting on June 17th, will likely result in Chinese tariffs against the European pork industry.
The move was a clear retaliatory measure against the EU-imposed tariffs against Chinese electric vehicles. The European Commission started an investigation probe last year, which found Chinese subsidies in almost every phase of EV production.
The new European tariffs increased prices of Chinese-made electric vehicles by as much as 38% over the already existing 10% measure. That brings European tariffs on Chinese EVs to 48%.
Brussels’ decision followed a similar hike by the United States, with Washington imposing a 100% tariff on Chinese EVs and other products.
Several reports pointed to a high likelihood of Chinese retaliation, which came swiftly after the EU’s move. The European Union is the largest exporter of pork meat and by-products to China, with roughly $6 billion in total exports in 2023.
Spain, the Netherlands, and Denmark are the highest European exporters, with Spain being the highest overall at $1.5 billion worth of exports. China’s commerce ministry Wang Wentao traveled to Spain this month, lobbying local officials ahead of today’s announcement.
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“Naked protectionism”
Wentao denounced the EU and American tariffs as “naked protectionism”, vowing to "resolutely take all necessary measures to firmly defend the legitimate rights and interests of Chinese companies”.
China will also likely target the EU’s agriculture sector, heavily subsidized by subsidies on the national and community levels.
The European Commission said it would cooperate fully with Chinese inspectors, saying that it "will follow the proceedings very closely in coordination with EU industry and our member states" and "intervene as appropriate to ensure that the investigation fully complies with all relevant World Trade Organization rules".
The Commission spokesperson also refused to compare the EU subsidies to the agriculture sector to China’s liquid injection in its EV industry. "Any subsidies that take place under the Common Agricultural Policy or indeed any other policy area in the European Union are strictly in line with our WTO obligations," he said, adding that not all subsidies are the same.
Some US officials also worry China could retaliate against its tariffs, exacerbating the trade war between the world’s two largest economies.
The American tech sector will likely be the hardest hit by sanctions, especially as Silicon Valley giants like Apple and Nvidia struggle with their exports to China.
