Beijing announces anti-dumping investigation into EU pork

On Monday, China's commerce ministry (MofCom) initiated an anti-dumping investigation into EU pork and pork byproducts.

Officially, the investigation was requested by the China Animal Agriculture Association (CAAA), a government-affiliated industry association that includes all of China's largest pig farming companies.

• But state media has spent weeks signaling the move would be made in retaliation to the EU's tariffs on China's EV exports.

Pork tariffs will hit supporters of the EV tariffs or other trade measures the hardest.

• Spain, a vocal advocate of the EV tariffs, accounts for half of the EU's more than USD 3 billion in pork exports to China (Reuters).
• France, the main backer of the EV tariffs, recently secured new market access for pork byproduct exports to China, worth ~USD 300 million.
• The Netherlands, under rising pressure from the US to cut China's access to semiconductor equipment, sold USD 620 million in pork to China last year.
• Denmark, also a major pork supplier, may be an unintentional casualty.

What's next: MofCom can drag out the investigation for up to 18 months, but provisional tariffs can also be announced after 60 days, by mid-August.

• We expect Beijing to wait until the EU finalizes its EV tariffs – by mid-October at the latest – before applying pork tariffs.

The bigger picture: Beijing doesn't want to spark a trade war.

• While this is unlikely to be the last of Beijing's retaliatory moves, we expect future action to remain similarly targeted, and to provide plenty of off-ramps for the EU to reconsider.