China Prepares Retaliatory Measures Against EU Tariffs

China Prepares Retaliatory Measures Against EU Tariffs

In a departure from its broad trade war tactics with the US, China is poised to wield targeted measures against the European Union (EU) in response to proposed tariffs on electric cars. This approach mirrors previous strategies employed against Australia, indicating a calculated response rather than blanket penalties.

Identified Targets: Brandy Faces Scrutiny

Chinese authorities have launched an anti-dumping probe on European brandy, risking tariffs, reminiscent of actions on Australian wine. France, backing EU tariffs on electric vehicles, faces exposure with its sizable brandy exports to China.

China’s scrutiny of European brandy echoes past actions, posing risks for France amid tariff vulnerabilities, WSJ Subscription Offers said.

Impact Analysis: Potential Tariffs on Pork

An investigation into alleged European pork dumping could result in tariffs affecting Spain, Denmark, and the Netherlands, major suppliers to China. Despite potential disruptions, China maintains diversified pork sources, including domestic production and imports from Brazil and the US.

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Wine and More: Mediterranean Nations on Alert

Wine, dairy products, and aircraft have surfaced as potential targets, with France and other Mediterranean nations facing substantial implications. Global wine surplus offers opportunities for alternative suppliers to fill potential gaps left by Chinese tariffs.

Automotive Sector: Focus on Germany

Rumors of retaliatory tariffs on European cars, particularly those with large engines, could predominantly impact Germany and Slovakia. Such measures could extend beyond EU borders, affecting American and Japanese manufacturers.

Unlikely Aviation Target

Despite speculation, significant actions in the aviation sector seem improbable, given Airbus and Boeing’s dominance. Targeting Airbus could inadvertently strengthen China’s reliance on Boeing, a delicate balance amidst geopolitical tensions.

Strategic Approach: Compliance with WTO Rules

China aims to justify its retaliatory actions within World Trade Organization rules, similar to past disputes with Australia. These measures seek to minimize consumer impact while exerting pressure on EU exporters supportive of electric car tariffs.

In summary, China’s forthcoming retaliatory measures against the EU’s proposed tariffs on electric cars are poised to be surgical and strategic, targeting specific products where it holds leverage, while navigating global trade norms.

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