TMTPost --  China signals it could further hit back at the European Union’s additional tariffs on electric vehicle (EV) imports after anti-dumping measures on brandy are implemented.

Credit：China Chamber of Commerce to the EU

Chinese authorities are conducting investigations into EU pork and dairy to fully protect the rights of all stakeholders, and will make objective and fair ruling based on the results of the investigations, a spokesperson of the Ministry of Commerce of China (MOFCOM) responded a question about development of anti-dumping and anti-subsidy investigations into these EU exports Tuesday. In the meantime, China is working on other measures such as raising tariffs on imported large-displacement fuel vehicles, the spokesperson added, according to website of the ministry.

The spokesperson reconfirmed China’s stance against the EU’s protectionist actions. China will take all necessary measures to resolutely safeguard the legitimate rights and interests of Chinese industries and enterprises, the person said.

The spokesperson’s remark came right after the MOFCOM announced on Tuesday it will impose temporary anti-dumping measures on brandy originating in the EU under the World Trade Organization (WTO) rules and the country’s laws and regulations. The ministry said its decision to require importers to pay a cash deposit on purchase was made following an investigation opened in January. Through the probe, the ministry found the domestic brandy industry is under substantial threat of damage, and there is a causal relationship between the dumping and the substantial threat of damage.

Effective from Friday, importers of brandy originating in the EU must place deposits with Chinese customs based on dumping margins of between 30.6% and 39%. The product subject to the temporary anti-dumping measures refers to spirits obtained by distilling grape wine in containers holding less than 200 liters, which are mainly used as consumer goods.

China’s blowback came on heels of the EU members’ vote to move forward elevated extra tariffs . The European Commission disclosed last Friday its proposal to impose definitive countervailing duties on imports of battery electric vehicles (BEVs) from China has obtained the necessary support from EU Member States for the adoption of tariffs. The announcement cleared hurdles for the EU to introduce up to 45% definitive tariffs following an anti-subsidy investigation. Since a qualified majority of 15 EU members  completed, the proposed definitive tariffs are set to go into effect from next month for five years.

China has threatened it could take actions to counter the EU’s hiked tariffs on EV imports, such as curbs on pork and dairy products. China started an anti-dumping investigation into brandy imported from the EU on Jan. 5, 2024. The probe would look at EU-produced brandy in containers holding less than 200 liters imported from Oct. 1, 2022 to Sept. 30, 2023, China’s commerce ministry said. It would also investigate any damage done to the Chinese brandy industry from Jan. 1, 2019 to Sept. 30, 2023. 

The MOFCOM announced holding an anti-dumping hearing on brandy imported from the EU on July 18 right after the European Commission announced it  imposed provisional countervailing duties of up to 37.6%, on top of the ordinary BEV import duty of 10%, on imports of BEVs from China.

The MOFCOM also said on June 17 it will probe into certain pork and pig by-products originating from the EU from Jan. 1, 2023 to Dec. 31, 2023, and will also investigate any damage done to related Chinese industries from Jan. 1, 2020 to Dec. 31, 2023. If the EU’s dumping practice has been confirmed after China’s preliminary investigation and has caused damage to Chinese domestic industries, temporary anti-dumping measures might be taken in accordance with WTO rules and China's anti-dumping regulations, He Yadong, spokesperson for the MOFCOM, said June, responding a question about whether China will levy temporary tariffs on pork imports from the EU at a press after launch of the investigation.

Asked about whether China will open anti-dumping probe on EU dairy imports, the spokesperson He said that the investigation agency will review applications filed by domestic industries in accordance with the law. "If the conditions for filing a case are met, the investigation agency will start the filing procedure, and disclose and release announcements in accordance with the law," said He.

Yuyuan Tantian, a social media influencer affiliated with state broadcaster China Central Television (CCTV), reported a day after the EU's pre-disclosure of provisional EV tariffs that China is promoting introduction of procedures related to tariff hike on gasoline cars with large displacement engine, more exactly, gasoline cars powered by engines larger than 2.5 liters.

If China raises provisional tariff rate of the abovementioned vehicles, European brands such as BMW and Mercedes-Benz will be the first to be affected, which means that European automobile exports to China will suffer a blow, Yuyuan Tantian wrote. The domestic auto industry calls for hike tariff on such vehicle imports to 25%, and the new tariff rate, if Beijing decides to impose, will be within the scope of China's commitment to the WTO and does by any means contradict the WTO rules, Cui Fan, professor in International Trade, School of International Trade and Economics (SITE) of the University of International Business and Economics (UIBE), told Yuyuan Tantian.