TMTPost -- China is targeting top European pork exporters amid its probe into imports from the European Union that could lead to export curbs to counter the bloc’s hiked tariffs on Chinese electric vehicles (EVs).

Credit：China Central Television

Chinese authorities will conduct the anti-dumping probe into certain pork and pig by-products imported from the EU through sampling, according to a statement of  the Ministry of Commerce (MOFCOM) on Thursday. Given the large number of EU exporters and Chinese domestic producers involved, a full investigation would overburden the investigating authorities and prevent the timely completion of the investigation, the ministry said in the statement.

Initial sampling result showed that the top three EU exporters in terms of export volume within the investigation period are selected and required to fill in a questionnaire within the prescribed time, namely Danish Crown A/S, VION Boxtel B.V., LITERA MEAT S.L.U., according to the statement. As for the investigation on damage done to Chinese industries, 24 Chinese companies are selected to fill in a questionnaire, the statement said. The sampled Chinese companies slaughtered 44.78 million pigs in total last year, accounting for 6.16 percent of the country's total pig output, according to the statement.

China has launched the abovementioned investigation a month ago.  MOFCOM said on June 17 it will probe into certain pork and pig by-products originating from the EU from Jan. 1, 2023 to Dec. 31, 2023, and will also investigate any damage done to related Chinese industries from Jan. 1, 2020 to Dec. 31, 2023. The probe is expected to conclude by June 17, 2025, but may be extended by half a year under special circumstances, the ministry said.

Europe’s pork industry faces a "nightmare scenario" of lower prices and falling profitability if China decides to impose restrictions following its anti-dumpling investigation, Reuters cited industry executives and analysts following China’s announcement of its investigation. "The full suspension of EU pork exports to China would be a potential nightmare scenario for the pork supply chain, with implications across the EU," said Justin Sherrard, global strategist animal protein at Rabobank.

Sherrard expected that the disruption would be felt across pork supply chains in Europe, resulting in lower prices and profit margins on unwanted stock produced by the region's farmers. The analyst doubted the ability of the EU exporters to find alternative markets for pork muscle meat cuts that are currently delivered to China, even though he did’t rule out their successful filling the vacancy of Chinese imports over time.

If the EU’s dumping practice has been confirmed after China’s preliminary investigation and has caused damage to Chinese domestic industries, temporary anti-dumping measures might be taken in accordance with World Trade Organization (WTO) rules and China's anti-dumping regulations, He Yadong, spokesperson for the MOFCOM, responded a question about whether China will levy temporary tariffs on pork imports from the EU at a press after launch of the investigation.

After the investigation is completed, Chinese Commerce Ministry will make a final ruling, and anti-dumping duties may be imposed if the relevant regulations are complied with, the spokesperson said.

The spokersperson’s remark came more than a week after the European Commission said it has pre-disclosed the level of provisional countervailing duties it would impose on imports of battery electric vehicles (BEVs) from China. 

Yuyuan Tantian, a social media influencer affiliated with state broadcaster China Central Television (CCTV), reported a day after the EU's pre-disclosure that China is promoting introduction of procedures related to tariff hike on gasoline cars with large displacement engine, more exactly, gasoline cars powered by engines larger than 2.5 liters.

 If China raises provisional tariff rate of the abovementioned vehicles, European brands such as BMW and Mercedes-Benz will be the first to be affected, which means that European automobile exports to China will suffer a blow, Yuyuan Tantian wrote. The domestic auto industry calls for hike tariff on such vehicle imports to 25%, and the new tariff rate, if Beijing decides to impose, will be within the scope of China's commitment to the WTO and does by any means contradict the WTO rules, Cui Fan, professor in International Trade, School of International Trade and Economics (SITE) of the University of International Business and Economics (UIBE), told Yuyuan Tantian.

Besides possible tariffs on cars, Yuyuan Tantian indicated China can slap with additional brandy import duties since the government is set to announce preliminary decision on the imports. China has initiated an anti-dumping investigation imported from the EU in January, which was deemed as the widening trade disputes between Beijing and the bloc.