The European Union has initiated a challenge at the World Trade Organization (WTO) against China’s anti-subsidy investigation into European dairy imports, marking a new phase in rising trade tensions between Brussels and Beijing.
The European Commission announced the WTO consultation request on Monday, contesting China’s probe, which began in August. The investigation targets subsidies provided under the EU’s Common Agricultural Policy (CAP) and national schemes in Ireland, Austria, Belgium, Italy, Croatia, Finland, Romania, and the Czech Republic.
“The commission is following through on its commitment to firmly defend the interests of the EU dairy industry and the Common Agricultural Policy against abusive proceedings,” the Commission said, describing China’s recent actions as based on “questionable allegations and insufficient evidence.”
The investigation covers products including fresh cheese, curd, blue cheese, and some milk and cream varieties. It follows other recent Chinese trade defense actions against European goods, escalating the row.
Electric Vehicle Tariffs and Dispute
Tensions have been high since July when the EU proposed new tariffs on Chinese electric vehicles (EVs). The decision followed an anti-subsidy investigation that found Chinese EVs were being sold at unfair prices, undercutting European automakers.
The EU is looking to protect its auto industry, which supports around 14 million jobs. The proposed tariffs are provisional but could become permanent for five years, pending a member state vote before the end of October.
In response, China has warned of a potential trade war and launched investigations into European brandy, pork, and dairy imports. Last month, China also filed an appeal with the WTO over the EV tariffs.
Ongoing Talks
Despite the tensions, diplomatic discussions continue. EU trade chief Valdis Dombrovskis recently held talks with China’s commerce minister, Wang Wentao, focused on resolving the EV tariff issue.
The EU’s WTO challenge is the first time it has contested an investigation at the initiation stage. If consultations don’t yield a resolution, the EU may request a formal WTO panel to review the case.
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