European Agricultural Exports to China Most Exposed to Potential Tariff Increase

by: Jessica Ferreira

China is threatening to impose higher import levies on European agricultural products, such as pork and dairy, according to a report by the Mercator Institute for China Studies (MERICS).

Chinese Commerce Minister, Wang Wentao, has warned of an increase in tariffs on EU exports, which are expected to target agricultural, food and beverage goods, with aerospace products being the least likely to be affected.

Dairy products, such as cheese, are also vulnerable, as Beijing is targeting Spain and France, major exporters of pork and dairy products, for supporting the European Commission’s probe on Chinese electric vehicles (EVs).

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In reality, reducing imports would help China’s pork industry, which has an oversupply, increasing prices and pitting Europe’s pork-exporting states against other members, the report added.

Beijing has also signaled that EU automotive exports to China could once again be subject to a 25% tariff, instead of the current 15%, while talks on the purchase of another hundred jets could be abandoned.

The economic retaliation arises amid the European Commission’s proposal for additional import tariffs on Chinese electric vehicles to compensate for competition-skewing subsidies.

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On top of an existing 10 percent tariff, Brussels announced an additional levy of 17.4 percent for BYD EVs, 20 percent for Geely, 38.1 percent for SAIC, 21 percent for other companies that had cooperated with its probe, and 38.1 percent for those that had not.

The proposed EV duties will apply provisionally until November, after which the new Commission will be able to apply definitive levies if it can secure a qualified majority of EU states’ votes.

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