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China has hit the EU's soft underbelly in its fight over electric vehicle imports: pork. Poultry and beef might be next – especially chicken feet and other bits that Europeans don't tend to eat, but depend on for sales.
It is a choice of Beijing. These days, food products are among the few products that China buys more than it sells to its bloc, and they have been first in the line of fire as Beijing retaliates with subsidized tariffs of up to 38 percent on electric cars. Who is
The change underscores how trade relations between the EU and China have been on the upswing since Beijing joined the World Trade Organization in 2001. Its trade surplus with Europe has grown in advanced appliances such as batteries, solar panels and cell phones.
The EU, meanwhile, still sells a lot of cars and airplanes. But increasingly its strength is serving China's 1.4bn consumers with more traditional consumer fare: cheese, wine and handbags.
The trade defense team at China's fearsome Ministry of Commerce isn't just experts in empty rhetoric. They have laser sights trained on the vulnerable areas of the EU's body politic, where a single shot can trigger a very loud outcry in parliaments and therefore governments.
The chosen target was an anti-dumping investigation into the EU's 2.5bn worth of pork imports a year, including off-cuts such as buns that feature in Chinese cuisine. Farmers, especially a vocal and influential pressure group whose noise takes the form of protests, know that they have few other alternative markets.
Some animals are only profitable because the farmer can sell the “fifth quarter” – such as the head, tail and internal organs – to the Chinese. Chicken feet, canned in many French dishes. Boucherieare a special delicacy.
Beijing has already launched an investigation into alleged dumping of brandy that will mainly affect France, which has pressured European Commission President Ursula van der Leyen to impose tariffs on vehicles.
Hoseok Lee-Makiyama, director of the European Center for International Political Economy in Brussels, said he also expected “retaliation in dairy, cheese and other foodstuffs that are common export staples for France and Italy”.
Trade in food and drink was about 6 billion euros in 2023, a six-fold increase in a decade. Meanwhile, European farmers have increased their herds to serve this growing market as domestic subsidies have been cut.
John Clarke, the European Commission's former chief agricultural trade negotiator, said the Chinese were well aware of the sensitivity after more than a year of farm protests over falling incomes. He thinks the drinks may come next.
Removing these barriers will also come at a cost. “When a European leader goes to Beijing to reopen the market for steak,” Clarke said, “we sell them the port of Piraeus. [in Greece]They buy feta cheese and yogurt.
The problem for Brussels is that the EU can't be too disruptive in return. It relies almost entirely on Chinese solar panels and doesn't want to increase the cost of going green. It also needs Chinese-made batteries for its electric vehicles.
Under US pressure, the Netherlands has ended exports of advanced chip-making machines, but Hermes scarf supply cuts are unlikely to bring the Chinese economy to its knees.
Guillaume Darien, economist at BNP Paribas, points out that the days of only buying cheap Chinese toys in Europe are over. “They now import more phones and motor vehicles: these two segments accounted for 17 percent of EU imports from China in 2023,” he wrote in a recent note.
China has gone by the book with the pork investigation, leaving it open to an appeal at the WTO if it determines there are subsidies.
A more ruthless alternative would be to target European products for allegedly falling short of food safety standards. For example, after the foot-and-mouth outbreak in 2001, China banned beef in many EU countries for more than 20 years. Some pork has been blocked since 2019 due to African swine fever.
There are limits to how much pork China can use to gain leverage in trade disputes. Food is too important to be held hostage, Clark said. “It would be very short-sighted because they are not self-sufficient.”