By Casey Hall, Lucy Craymer and Mei Mei Chu
SHANGHAI/WELLINGTON (Reuters) – Global food companies, from dairy producers to pork exporters, are on alert for possible tariff retaliation from China after the European Union decision Wednesday to impose anti-subsidy duties on electric vehicles (EVs) made in China.
Chinese state media reported that domestic companies were preparing to call for investigations into some European imports of dairy and pork products over concerns of subsidies or dumping, moves that could lead to lengthy trade suspensions.
Chinese companies reserve the right to submit requests to trigger anti-subsidy and anti-dumping investigations into European imports of dairy and pork products, its Commerce Ministry said on Thursday when asked if Chinese industry groups were lobbying on her to do it.
“China’s domestic industries have the right to file investigation requests to safeguard the normal order of market competition and their legitimate rights and interests,” ministry spokesperson He Yadong said.
“If additional trade barriers are added, it could cause … a shake-up of global markets,” said Kimberly Crewther, executive director of the Dairy Companies Association of New Zealand.
New Zealand is the world’s largest exporter of dairy products and also a production base for foreign companies, including French dairy producer Danone.
“We always prefer to see situations where trade is stable and certain…Markets don’t like uncertainty,” Crewther added.
The EU was China’s second-largest source of dairy products, accounting for at least 36% of total import value in 2023, second only to New Zealand, according to Chinese customs data. Australia was the third largest exporter.
Although it remains unclear which products China could target in the event of retaliation, whey powder, cream and fresh milk were the main products of the 1.7 billion euros ($1.8 billion ) of dairy product exports to China last year, according to data from the Directorate-General of the European Commission. -General of Agriculture and Rural Development, who cites Eurostat.
Countries like the Netherlands, France, Germany, Ireland and Denmark have the largest dairy industry exposure to the Chinese market.
The Netherlands, Denmark and France are also important suppliers of pork, although Spain was China’s top supplier last year, accounting for almost 23% of its total meat imports. pork, followed by Brazil and the United States.
“We are worried,” Arnaud Rousseau, president of FNSEA, France’s largest farmers’ union, told reporters when asked about possible Chinese action against pork imports from the EU.
“There are certain parts of pork which are not consumed in Europe and which must find markets, and China is an important market… We can quickly have problems if we do not have trade with certain countries. “
China imported $6 billion worth of pork last year, including offal, according to Chinese customs data.
Cristina Alvarado, business manager of data and insights at the New Zealand Stock Exchange, said Chinese tariffs or trade barriers against EU dairy products could help New Zealand further increase its market share .
Major New Zealand producers Fonterra and A2 already have thriving trade with China, and Australia and New Zealand have free trade deals with China that remove import duties.
China imported $848 million worth of dairy products from Australia last year, according to Chinese customs data. Its dairy imports from New Zealand reached $5.52 billion in 2023, almost half of the total value of its dairy imports.
OPEN TRADE
As trade tensions between the EU and China escalate, some European officials have warned against imposing import duties on food products.
EU Agriculture Commissioner Janusz Wojciechowski told Reuters during his visit to China in late April that his intention was “to avoid as much as possible that agriculture pays the cost of problems in other sectors.”
“The position of the European Union is that open trade in food products is a very important instrument for ensuring food security globally,” he said.
China has historically occupied a different position, with food products often the target of retaliatory tariffs imposed in previous trade spats.
In January, Brandy was targeted by an investigation launched by Beijing, a move seen as retaliation for France’s support of the EU investigation into Chinese-made electric vehicles.
China also passed a law in April to strengthen its ability to retaliate if the United States or EU imposed tariffs on exports from the world’s second-largest economy.
Australian wine and barley have been targeted by an anti-dumping investigation launched by Beijing after Australia’s calls for an independent investigation into the origins of the COVID-19 virus in 2020. China has not lifted these prohibitive tariffs only recently.
Beijing has also targeted Australian beef and lobsters following separate investigations.
($1 = 1.6292 New Zealand dollars)
(Reporting by Casey Hall in Shanghai, Mei Mei Chu in Beijing and Lucy Craymer in Wellington; additional reporting by Joe Cash and Gus Trompiz; editing by Miyoung Kim and Mark Heinrich)
