CHINA – China has hinted at potential retaliation against the European Union (EU) in a growing trade dispute that could escalate similarly to China’s trade tensions with the United States.  

This warning was conveyed through Yuyuan Tantian, a social media account linked to China’s state media, which often signals the government’s stance on trade issues. 

“If the EU keeps pursuing investigations into Chinese firms, then China will very likely have to take a series of measures to hit back,” the post stated.  

The EU is currently investigating Chinese subsidies across various industries, including threats of tariffs on electric carmakers and restrictions on Chinese firms in rail and energy tenders. 

Last week, the US announced new tariffs on some Chinese imports, raising concerns in Beijing about potential similar actions from its allies. 

The state-media post did not specify potential countermeasures but suggested that the EU relies on China as a significant buyer of agricultural products, such as wine and dairy, as well as aircraft.  

The Chinese Chamber of Commerce to the EU echoed this warning, noting that “European wine and dairy products may find themselves caught in the crossfire.” This threat could jeopardize the US$800 million wine trade between the EU and China. 

While China’s wine imports from the EU have contracted in recent years, the potential countermeasures could still affect over US$777 million worth of EU wines, representing nearly 70 percent of China’s total wine imports last year, according to official data.  

Historically, China has blocked imports from countries such as Australia, the Philippines, and Norway, citing reasons like food safety and anti-dumping. Should China target European exports, other producers might benefit.  

France is currently the largest European exporter of wine to China. However, China’s overall wine imports have been declining, and it recently removed punitive tariffs on Australian wine. 

In addition to the potential retaliation on agricultural goods, China has launched investigations into alleged dumping of chemicals by the EU, the US, and others.  

In January, China also initiated an anti-dumping investigation into EU liquors, including cognac, an issue that was discussed during Xi’s visit to France. 

EU leaders argue that their industries are at risk from China’s subsidized production and do not enjoy fair access to Chinese markets.  

While some EU members have been cautious about responding with tariffs, European Commission President Ursula von der Leyen stated after meeting with Xi that Europe is prepared to use all available tools to protect its industries. 

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