China targets EU pork in tit-for-tat trade spat

China has launched an anti-dumping investigation into pork imports from the European Union after the bloc decided to impose new tariffs on Chinese electric vehicles. 

The investigation could eventually lead to an increase in China’s tariffs on EU pork products, hitting Spain, the Netherlands, Denmark, Germany and France.

Currently, China levies a 12% tariff on the EU’s meat imports. Some analysts said if the levy is increased to 20% many European exporters will feel the heat of the trade war. They said pork exporters in the EU will not be able to offset their losses in China, even if they explore new markets such as Vietnam and the Philippines.

China’s Ministry of Commerce said Monday that its investigation will focus on pork imported from the EU for human consumption, including fresh, dried, smoked, preserved, cold and frozen whole cuts, as well as pig intestines, stomachs and bladders. It said the probe will begin immediately.

It added that the probe was prompted by a complaint submitted by the China Animal Husbandry Association on June 6 on behalf of the domestic pork industry in China.

It said those who were affected by the alleged dumping activities should contact the Trade Remedy and Investigation Bureau of the Ministry of Commerce to join the investigation. It said they can submit their opinions to the bureau within 20 days from Monday. 

Statistics showed that China consumed a total of 57.94 million tons of pork and pork by-products in 2023 while the country only imported 1.55 million tons.

About half of pork imports in China came from Europe. From 2014 to 2020, China’s pork imports continued to grow. After the figure peaked at 4.39 million tons in 2020, it has declined gradually. It fell to 1.55 million tons last year. 

Cailianpress.com, a Chinese financial news website, said pork imported from the EU only accounted for a small portion of China’s total pork consumption, so a drop in supply from the region will not have a big impact on pork prices in China. It said, on the contrary, many pig farms in the EU will suffer as they won’t be able to find new buyers for their pig internal organs, trotters, tails and ears, which are not generally used in European dishes. 

In Chinese cuisine, pig intestines, stomachs and bladders usually go into “dim sum” to be consumed in a hotpot. Pork knuckles are cooked with ginger and vinegar. Pig lungs, tails and ears are for making soups. 

Chronology of retaliation

On May 26 the state-owned Global Times said the Chinese government was considering starting an anti-dumping investigation into pork imports from the EU. On June 1, Chinese Commerce Minister Wang Wentao visited Spain and said the EU’s anti-subsidy investigations into Chinese EVs and other products were conducted under false pretexts such as Chinese overcapacity and unfair competition.

However, Beijing’s warnings failed to stop the EU from imposing a 17.4-38.1% tariff on Chinese EVs on June 12.

Last year, Spain exported about 560,000 tons of pork products worth 1.2 billion euros (US$1.29 billion) to China, according to Interporc, the country’s pork producers’ association. 

Since China launched an investigation into the EU’s pork imports, Spain has called for trade talks. Spanish Agriculture Minister Luis Planas said he hoped that there would be room for negotiation to avoid the imposition of tariffs on Spanish agricultural and food products. 

Apart from Spain two other countries, the Netherlands and Denmark, will also be hit by China’s latest anti-dumping probe as they exported to China pork products worth US$620 million and US$550 million, respectively, in 2023.

A spokesperson of the European Commission said the EU is not worried about China’s anti-dumping probe and will intervene appropriately to ensure that the investigation complies with the World Trade Organization rules.

China’s pork supply

According to an article published by the Economic Daily earlier this year, China’s pork prices had been declining since September 2020 due to an oversupply situation in the markets, except for a slight rebound between April and November 2022. 

Li Pengcheng, an analyst at the Ministry of Agriculture and Rural Affairs, was quoted as saying in the article that many pig farms were losing money due to the prolonged down cycle of the sector. 

The decline in pork prices also suppressed China’s consumer price index, which increased only 0.2% year-on-year in 2023, compared with the average 2% growth in 2016-2019.

Since April this year, China’s pork prices have regained growth momentum. On Monday, Sichuan Online, a state-owned news website, said many pig farmers in Sichuan province turned profits this month, meaning that the pork industry may have entered an up cycle. 

Some commentators said the rising demand for pork in China, which is attractive to the EU, will provide Beijing with more bargaining chips in a trade negotiation with the bloc. They said China may also consider importing more pork products from Brazil and Russia if needed. 

Read: China to retaliate if Europe raises EV tariffs 

Read: Chinese EV firms can absorb EU tariffs: expert

Follow Jeff Pao on X: @jeffpao3

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