China Targets European Pork Imports in Response to EU Electric Vehicle Tariffs

China is targeting European farmers with an investigation into European Union pork imports, a move widely seen as a response to the EU’s plan to impose provisional tariffs on Chinese-made electric vehicles.

The Commerce Ministry didn’t explicitly link the pork probe to the EV tariffs when it announced the investigation on Monday, but the timing suggests a retaliatory move. The move also provides China with leverage in any trade negotiations.

China could have chosen to impose a 25% duty on gasoline-powered vehicles with large engines, citing climate change concerns, a move that would have directly impacted Mercedes and BMW. However, the government’s decision to hold back, at least for now, could be attributed to the German auto industry’s opposition to the EU tariffs and its significant production presence in China.

The Chinese market is crucial for German automakers. Hildegard Müller, head of the German auto association (VDA), criticized the EU’s tariff announcement on June 12, calling it a step away from global cooperation. “This measure further increases the risk of a global trade conflict,” she stated.

The investigation into EU pork imports will cover various products, including fresh and frozen pork meat, intestines, and other internal organs. The announcement indicated a one-year investigation with a potential six-month extension.

Olof Gill, a spokesperson on trade for the European Union, told journalists in Brussels that EU farm subsidies “are strictly in line with our WTO obligations.” He emphasized that the commission would closely monitor the investigation and intervene if necessary to ensure compliance with World Trade Organization rules.

Chinese officials have labeled the EU’s investigation into subsidies for electric vehicle production in China as “typical protectionist behavior” that violates WTO rules. The EU plans to impose provisional tariffs ranging from 17.4% to 38.1% on EVs from China for four months starting July 4. These tariffs would apply to vehicles exported to Europe by both Chinese and foreign brands, including Tesla.

EU exports of pork products to China peaked at 7.4 billion euros ($7.9 billion) in 2020 when China needed to source pork from abroad due to the decimation of its domestic pig herd by a swine disease. Since then, exports have declined to 2.5 billion euros ($2.6 billion) last year. Spain accounted for almost half of this total.

“We must avoid an escalation of trade countermeasures,” said Spanish Economy Minister Carlos Cuerpo.

The Spanish pork industry association Interporc stated in a press release that it would “offer complete collaboration with Chinese authorities” and provide any necessary documents.

“The agricultural industry does not tend to be the source of conflicts but it does end up paying the price often enough,” said Spain’s Minister for Agriculture, Luis Planas, highlighting the US’s imposition of tariffs on some EU farming products in 2019 during a dispute over subsidies for aircraft maker Airbus.

“I believe that we have both the time and the margin to negotiate and try to avoid this trade conflict,” Planas said.