Washington [US], August 22 : The trade war between China and the European Union escalated after Beijing launched an investigation into EU diary products over government subsidies.
The announcement comes a day after the EU confirmed of imposing additional tariffs on most electric vehicles imported from China.
China's Ministry of Commerce said that local dairy producers had requested the probe, citing 20 different subsidy programs that may benefit the EU dairy industry.These ranged from financial support for farming equipment and supplementary income for young farmers to environmental and administrative subsidies, CNN reported.
An initial review of the evidence had found sufficient grounds for an anti-subsidy investigation, the commerce ministry added in a statement. According to the CNN the investigation could take up to 18 months.
The EU's executive arm would follow Beijing's investigation "very closely" and "intervene as appropriate" to ensure the probe complied with World Trade Organization rules, CNN quoted Olof Gill, a spokesperson for the European Commission as saying.
"The Commission will firmly defend the interests of the EU dairy industry and the common agricultural policy," he added, referring to the bloc's official program of support for farmers.
The China Chamber of Commerce for Import and Export of Machinery and Electronic Products on Wednesday voiced its strong objection to the European Commission's plan to slap tariffs of up to 36.3 percent on imports of Chinese electric vehicles (EVs), Xinhua reported.
In a statement, the industry body said that the commission's anti-subsidy probe into Chinese EVs did not originate from an EU industry complaint, lacked transparency, and failed to provide an objective analysis of damage to the EU industry.
On Tuesday, the commission published a draft plan to make the tariffs definitive, at slightly revised rates, subject to approval by EU member states. This came after it announced extra provisional tariffs of up to 37.6 percent on Chinese EV makers in July. It launched its anti-subsidy investigation into Chinese EVs in October 2023.
Since October 2023, the EU has issued more than 40 restrictions on trade and investment against China. Among them, the EU launched 35 trade remedy investigations into Chinese products worth $28.4 billion.
The United States imposed sanctions on more than a dozen companies in China and Hong Kong for their support of Russia's war in Ukraine as part of a tranche of nearly 300 new sanctions unveiled Wednesday.
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