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Analysis Pigs & Pork

China threatens boycott on EU pig and dairy exports

June 3, 2024 - Matthijs Bremer

The European pig and dairy sector seem to be at risk of becoming victims of a conflict between China and the European Union. On the website of the Chinese trade delegation to the EU (CCCEU), it is stated that the Asian country demands that the European Union cease an investigation into the dumping of Chinese electric cars.

It appears that the European meat and dairy sector could be victims of an impending trade war. In response to the investigation into possible Chinese dumping of cheap electric cars, China has initiated an investigation into the dumping of pork. The CCCEU also threatens stricter import restrictions on dairy and wine. However, the exact details of any measures against all three industries remain unknown.

Trade Rules
Brussels believes that China engages in unfair competition in the European car market, as Chinese car manufacturers can rely on significant state support from Beijing. The issue has been ongoing for a while. In October 2023, the European Union launched an investigation into the exports of Chinese electric cars. A decision on whether the European Commission wants to exclude Chinese cars was expected on June 5. However, the decision is likely to be postponed until June 10 (the day after the European elections in many member states). This is probably to prevent excessive polarization just before the elections.

However, China views the criticism of its exports as protectionism. The Chinese government states that the European Union is violating its own trade rules and claims that there are no subsidies that contravene European regulations. From the Chinese perspective, the EU is mainly trying to destabilize the Chinese economy and supply chains to promote its own auto industry. The country calls on the European Union to halt the investigation.

Auto Market Also Concerned
Interestingly, the European auto industry does not support the attempt to exclude Chinese cars from the European market. German manufacturers, in particular, are against it, given that China is the largest market for German cars. China threatens to increase tariffs on European cars by 25%.

Trading houses in the dairy sector take China's threat seriously and fear the consequences of a potential trade war between the two superpowers.

Matthijs Bremer

Matthijs Bremer is a market specialist in pork, beef, and poultry meat at DCA Market Intelligence. He also monitors the protein transition, keeping an eye on developments in cultured meat and meat substitutes.
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