China Retaliates with EU Trade Barrier Investigation... Conflict Intensifies

Chinese authorities have launched an investigation into trade barriers imposed by the European Union (EU) on products such as railway locomotives, solar power, and wind power. This move comes amid escalating trade tensions between the two sides following the EU's provisional 'tariff bomb' measures on Chinese electric vehicles.

On the 10th, China's Ministry of Commerce announced on its website that it would begin an investigation into trade and investment barriers related to measures taken by the EU under the Foreign Subsidies Regulation (FSR) and its implementing rules during the investigation of Chinese companies. The investigation follows a request submitted last month on the 17th by the China Chamber of Commerce for Import and Export of Machinery and Electronic Products.

The Ministry of Commerce intends to examine whether the EU's preliminary, in-depth, and unannounced investigations concerning subsidies to Chinese companies were appropriate. The sectors under investigation include railway locomotives, solar power, wind power, and safety inspection equipment. Electric vehicles were not specifically mentioned. This trade barrier investigation must be completed within six months, with a possible extension of three months until April next year under special circumstances.

The China Chamber of Commerce to the EU (CCCEU) expressed support for the Ministry of Commerce's action, pointing out that "the European side conducted investigations beyond the scope of the FSR against Chinese companies." It added, "Despite opposition from Chinese companies, the EU side took documents containing core technical information classified as commercial secrets," emphasizing "strong dissatisfaction and opposition to the EU's improper practice of abusing investigations to collect technical information."

At a regular briefing on the 27th of last month, China's Ministry of Commerce stated, "We are highly concerned about the EU's FSR-related actions seriously negatively impacting Chinese companies' exports, investments, and operations in Europe, and have expressed strong dissatisfaction and firm opposition multiple times." It also revealed that it had received and was reviewing the application for the trade barrier investigation.

Earlier, the European Commission, the EU's executive body, announced on the 12th of last month plans to impose additional tariffs based on a provisional conclusion of an anti-subsidy investigation into Chinese electric vehicles. On the 4th of this month, it set provisional countervailing duty rates ranging from 17.4% to 37.6% for the next four months. During this period, the 27 EU member states will vote on whether to convert the provisional tariffs into definitive tariffs for the next five years.

Since the provisional countervailing duties are applied in addition to the EU's existing 10% tariff, the total tariff rate imposed on Chinese electric vehicles during the four months will be between 27.4% and 47.6%.

While opposing the EU's tariff imposition, China has also initiated an anti-dumping investigation into European pork and pork by-products last month and hinted at a possible investigation into dairy products. The trade conflict between the two sides is intensifying, with accelerated progress in the EU's anti-dumping investigation into EU-origin brandy, which began in January this year.

This content was produced with the assistance of AI translation services.