TMTPost -- China hits back at the European Union with an investigation targeting the bloc’s dairy industry.

Credit：China Central Television

China launched an anti-subsidy investigation into certain dairy products imported from the EU, the Ministry of Commerce (MOFCOM)announced Wednesday. The probe has been opened in response to an application submitted by the Dairy Association of China and the China Dairy Industry Association on behalf of the domestic industry in July, the ministry said in a statement.

The ministry said it has requested a consultation with the EU authority over the probe on August 7. The probe is expected to end before August 21, 2025, but may be extended for half a year under special circumstances, according to the ministry.

During the investigation, China will look into whether there is evidence that certain dairy products originating from the EU, including fresh cheese, curd and blue cheese, benefited from subsidies from between April 1, 2023 and March 31, 2024. It will also examine any damage done to related Chinese industries from Jan. 1, 2020 to March 31, 2024. A total of 20 EU subsidies will be investigated, including those from the region's Common Agricultural Policy as well as subsidy programs initiated by EU members such as Ireland, Austria, Belgium and Italy.

The move of the ministry highlighted increasing trade tensions between China and the EU since the latter decided to impose hefty tariffs on Chinese electric vehicle (EV) imports. The MOFCOM has signaled in June it could take actions against the EU dairy imports more than a week after the European Commission pre-disclosed up to 38.1% of provisional countervailing duties it would impose on imports of battery electric vehicles (BEVs) from China, on top of the ordinary BEV import duty of 10%. A spokesperson with the ministry the investigation agency will review applications for probe into dairy imports filed by domestic industries in accordance with the law.

The latest investigation into the EU dairy products came as a new plan Brussels disclosed to levy duties despite China’s warning and ongoing efforts of communications to find solutions.  

The European Commission unveiled Tuesday its draft decision to impose definitive countervailing duties on imports of BEVs from China to interested parties.The Commission said it would make a slight adjustment of the proposed duty rates based on substantiated comments on the provisional measures, though it still believes Chinese EV production has been benefited from subsidies. The regulatory body proposed to add up to 36.7% to the current 10% duty faced by Chinese exporters, modestly lowered from the initial maximum planned duty of 37.6% set in the start of July. 

China firmly opposes the latest draft that the EU released to slap hefty new tariffs on Chinese EVs and will take all necessary measures to defend the legitimate rights and interests of Chinese enterprises, a spokesperson with the  MOFCOM said Tuesday. The EU's anti-subsidy investigation process on Chinese EVs was an act of "unfair competition" under the guise of "fair competition," and its latest draft decision to slap extra tariffs was based on the "facts" unilaterally determined by the EU, rather than facts recognized by both sides, said the spokesperson.

Beijing will take all measures necessary to firmly safeguard Chinese companies’ legitimate rights and interests, Mao Ning, the spokesperson of China’s Foreign Ministry, reiterated the pledge at a press Wednesday. Calling the EU probe a typical protectionist and politically-motivated move, Mao urged the EU to stop pursuing such wrong action at once, stop politicizing and weaponizing economic and trade issues, show real sincerity, and work with China to speed up discussions for a proper way to resolve this, so as to avoid escalating trade frictions and undermining the trust and cooperation between China and the EU.