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The threat of a Europe-China trade war looms as Beijing launches an antidumping probe on pork

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Beijing’s response to steep European tariffs on China-made EVs did not take long to materialize. On Monday, officials announced an antidumping probe on European pork imports, the first retaliatory measure since the European Union imposed tariffs as high as 38% on electric-vehicle imports from China last week.

China’s move was more a matter of when, than if. State media, like the English-language outlet Global Times, had reported that Chinese industries had requested a probe into EU pork imports.

The European Union announced a probe into Chinese EVs last October, investigating whether cars made in China received an unfair level of subsidies. Since then, Brussels has launched probes into Chinese behavior in several other industries, including wind turbines, iron or steel products coated with Chinese tin, and procurement of medical devices.

Beijing launched an antidumping probe into European brandy in January, which analysts described as the “first bullet” in a potential trade war with Europe.

Not all EU countries are welcoming the prospect of a tariff spiral with Beijing. Germany, in particular, has publicly expressed worries about retaliation and is reportedly hoping for a compromise between Brussels and Beijing before the EU’s new tariffs go into effect in July.

China, the world’s largest pork consumer, imported about $6 billion worth of pork products last year, according to Chinese customs data. More than half of that came from the EU. Chinese retaliation against pork could hurt economies like the Netherlands, Spain, and Denmark. German pork exports to China suffered after African swine fever, a disease deadly to pigs, was found in its hog herds in 2020.

Pork is China’s favorite meat, and the government even operates a strategic reserve to help stabilize prices when there’s a shortage. China’s pig population declined significantly between 2018 and 2021 due to an epidemic of African swine fever, prompting Beijing to push pig farmers to expand production.

But China may have overshot. The country is now dealing with an oversupply of pork, leading to financial losses for some major pork producers. Source: Fortune

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