China has opened an anti-subsidy probe into EU cheese, milk and cream imports, adding to its investigation of EU brandy and pork, a day after the bloc published a revised tariff plan for China-made electric vehicles (EVs).
Here are the main issues:
WHY IS CHINA SOUR?
Beijing is already assessing whether EU brandy and pork imports are being sold below market rates. Its third probe, on whether EU dairy products benefit from subsidies, expands the number of member states in its crosshairs as they evaluate a plan to put tariffs of up to 36.3% on Chinese EVs ahead of an October vote on their implementation.
In an advisory vote on the proposed EV tariffs in July, France, Italy and Spain backed them, while Germany, Finland and Sweden abstained, government sources have said.
WHO'S MOST AT RISK?
With the latest dairy investigation, France, Spain, the Netherlands and Denmark - the biggest exporters of brandy and pork to China in Europe - are now the EU states facing the brunt of Chinese pressure to drop the EV levies.
France stands to be worst affected as it exported $211 million worth of dairy last year, Chinese customs data showed.
Cumulatively, Beijing's trade investigations could hit France, Denmark, the Netherlands and Spain the hardest, as they are also Europe's biggest pork exporters, while 99% of China's imported brandy came from France last year.
Italian, Danish, Dutch and Spanish dairy farmers also look set to suffer, having sold to China $65 million, $55 million, $52 million and $49 million worth of the types of goods that Beijing has said it would specifically investigate.
HOW COULD THE SITUATION DEVELOP?
China's state-owned tabloid, Global Times, which first reported that Beijing was considering the probes, in June also suggested that an anti-dumping investigation into European large-engine gasoline cars could be on the cards.
Such an investigation has not yet come to fruition but would hit Germany hardest as it was the largest exporter of vehicles with engines of 2.5 litres or above to China last year, shipping $1.2 billion worth.
