European dairy, pork producers wary of Chinese retaliation for EV tariffs | World News - Hindustan Times
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European dairy, pork producers wary of Chinese retaliation for EV tariffs

Reuters |
Jun 13, 2024 02:58 PM IST

EUROPE-CHINA/TRADE-RETALIATION (UPDATE 1, PIX):UPDATE 1-European dairy, pork producers wary of Chinese retaliation for EV tariffs

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European dairy, pork producers wary of Chinese retaliation for EV tariffs
European dairy, pork producers wary of Chinese retaliation for EV tariffs

Uncertainty after EU slaps anti-subsidy duties on Chinese EVs

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China's history of food tariffs raises retaliation risk

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New Zealand could leap into breach to expand trade with China

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EU officials have advocated open trade in foodstuffs

By Casey Hall, Lucy Craymer and Mei Mei Chu

SHANGHAI/WELLINGTON, - Global food companies from dairy producers to pork exporters are on high alert for potential retaliatory tariffs from China after the European Union's decision on Wednesday to impose anti-subsidy duties on Chinese-made electric vehicles .

China's state media have reported that domestic companies are preparing to request investigations into some EU dairy and pork imports over anti-subsidy or anti-dumping concerns, moves that could result in lengthy trade suspensions.

Chinese firms reserve the right to submit applications to prompt anti-subsidy and anti-dumping inquiries into European dairy and pork imports, its commerce ministry said on Thursday when asked whether Chinese industry groups were lobbying it to do so.

"Chinese domestic industries have the right to file applications for investigations to safeguard the order of normal market competition and their legitimate rights and interests," ministry spokesperson He Yadong said.

"If you have additional trade barriers it could cause ... reshuffling of global markets," said Kimberly Crewther, executive director of representative body Dairy Companies Association of New Zealand.

New Zealand is the world's largest exporter of dairy products and also a production base for foreign companies including French dairy producer Danone.

"We always prefer to see situations where trade is stable and certain ... Markets don’t like uncertainty," Crewther added.

The EU was China's second-largest source of dairy products with at least 36% of the total value of imports in 2023, only behind New Zealand, according to Chinese customs data. Australia was the No. 3 exporter.

While it remains unclear which products China could target for retaliation, whey powder, cream and fresh milk were the top items in the EU's 1.7 billion euros worth of dairy exports to China last year, according to data from the European Commission's Directorate-General for Agriculture and Rural Development, which cited Eurostat.

Countries including the Netherlands, France, Germany, Ireland and Denmark have the largest dairy industry exposure to the Chinese market.

The Netherlands, Denmark and France are also major suppliers of pork, though Spain was China's top supplier last year, making up nearly 23% of its total pork imports, followed by Brazil and the United States.

"We are worried," Arnaud Rousseau, president of the FNSEA, France's largest farmers' union, told reporters when asked about possible Chinese action against pork imports from the EU.

"There are certain parts of the pig that are not eaten in Europe and that need to find markets, and China is an important market...We can quickly have problems if we don't have trade with certain countries."

China imported $6 billion worth of pig, including offal, from the EU last year.

Cristina Alvarado, data and insights commercial manager at New Zealand's Exchange, said Chinese tariffs or trade barriers against EU dairy could help New Zealand grow its market share even further.

Major New Zealand producers Fonterra and A2 are already doing a roaring trade with China, and both Australia and New Zealand have free trade agreements with China that remove import duties.

China imported $848 million worth of dairy products from Australia last year, according to Chinese customs data. Its dairy imports from New Zealand reached $5.52 billion in 2023, nearly half the total value of its dairy imports.

OPEN TRADE

As trade tensions between the EU and China intensify, some European officials have warned against imposing import duties on food products.

EU Agriculture Commissioner Janusz Wojciechowski told Reuters during his visit to China in late April that it was his intention to "avoid as much as possible that agriculture pays the cost of the problems in other sectors".

"The European Union position is that the open trade of food is a very important instrument to ensure food security at the global level," he said.

China has historically held a different position, with food products often the target of retaliatory tariffs levied as part of previous trade spats.

In January, brandy was targeted in an inquiry instigated by Beijing, a move perceived as retaliation for France's support of the EU investigation into Chinese-made EVs.

China also passed a law in April to strengthen its ability to hit back should the United States or EU impose tariffs on exports from the world's No. 2 economy.

Australian wine and barley were targeted in an anti-dumping investigation Beijing launched after calls from Australia for an independent inquiry into the origins of the COVID-19 virus in 2020. China only recently lifted those prohibitive tariffs.

Beijing also targeted Australian beef and lobsters following separate investigations.

This article was generated from an automated news agency feed without modifications to text.

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