China slaps initial duties on EU pork imports

By Ella Cao and Lewis Jackson

BEIJING (Reuters) -China on Friday placed initial anti-dumping duties of up to 62.4% on pork imports worth over $2 billion from the European Union, deepening trade tensions that spiked when the bloc imposed tariffs on China-made electric vehicles.

The Ministry of Commerce's preliminary investigation into pork products found evidence of dumping that damaged the domestic industry and approved duties starting on September 10, according to a release on Friday.

Companies that collaborated with the investigation, among them Spanish, Danish and Dutch firms, received duties ranging from 15.6% to 32.7%. All other firms were assigned 62.4%.

Launched in June last year, the investigation is widely seen as retaliation for EU tariffs on electric vehicles and has hit major producers such as Spain, the Netherlands and Denmark.

The European Commission said the investigation was based on "questionable allegations and insufficient evidence" and that it had not yet determined its response.

"But I can categorically assure you that we will take all the necessary steps to defend our producers and industry," a spokesperson said.

China also has an anti-subsidy case looking into EU dairy exports and anti-dumping measures on EU brandy, which allows exporters to avoid duties if they commit to sell at no lower than a set minimum price.

Beijing has pressed Brussels to replace EV tariffs with a similar price commitment by China-based producers, but negotiations between the two sides have failed to yield an agreement.

Friday's decision is bad news for producers who had hoped Beijing’s decision to extend the investigation for six months in June this year meant a deal over the bloc’s electric vehicle tariffs was in the offing.

A significant portion of the bloc's pork shipments to China consists of offal - including pig ears, noses and feet - highly valued in Chinese cuisine but with few alternative destinations.

"This is worrying news for us. We're concerned about the impact this will have on prices on the European market," said Anne Richard, director of French pork industry association INAPORC.

The decision is only preliminary and could theoretically be changed when the investigation ends in December. There is also precedent for China extending investigations after levying tariffs, as in the case of Canadian canola.

Even Rogers Pay, an analyst at Beijing-based Trivium China who specialises in agriculture, said with just a few months left the odds of finding a negotiated solution were "increasingly slim".

(Reporting by Beijing Newsroom, Gus Trompiz in Paris, Philip Blenkinsop in Brussels; Editing by Kevin Liffey, Alexandra Hudson)