China launches anti-subsidy probe into EU dairy products as trade spat escalates

The tit-for-tat anti-subsidy probe is seen as a response to the EU's tariffs on imported electric vehicles.

Transcript

00:00The Chinese government on Wednesday said it has initiated an anti-subsidy investigation

00:06into dairy products imported from the European Union. The EU exported 1.7 billion euros in

00:11dairy products to China last year, down from 2 billion in 2022. Analysts say Beijing may

00:18be playing into tensions within the farming sector.

00:20There is a Chinese strategy to occupy a space in the European economy and to use what is

00:29perceived as our strong point of exports, food and agriculture. But we must not be

00:35fooled and we must see that it is an iron fist that is being played and we must defend

00:42in a fairly clear way the common agricultural policy, which is a false problem.

00:48Beijing's action is seen as a response to the European Union's decision to update the

00:54tariff rate on electric vehicles imported from China. In this trade tit-for-tat, the EU is also

01:02at odds with Chinese subsidies for wind turbines and solar panels. On the other side, Beijing opened

01:09an inquiry into European pork, liquor, chemical products and medical devices. Speaking at a

01:16conference in Spain on Tuesday, the EU's Chief of Diplomacy, Josep Borrell, admitted it was

01:21possible that a trade war with China was inevitable. But an analyst says it's too early to say.

01:27I think for a real trade war to happen, you need some kind of a downward spiral where

01:32retaliatory measures of each side basically kind of get to a point where you get to a very large

01:38share of total trade, which would be affected by measures. Right now it's somewhat contained

01:44to certain sectors and certain industries and I think it will depend on also on how much of

01:49these measures actually get into place eventually. But some analysts say the real test will be what

01:57happens if Republican candidate Donald Trump, who advocates for greater trade protectionism,

02:03wins the US elections in November.