In response to the European Union’s investigations into Chinese companies, China has announced an inquiry into whether the EU has engaged in unfair trade practices. This development marks the latest escalation in the ongoing trade tensions between the two economic powerhouses.

The Chinese Commerce Ministry stated that the investigation will scrutinize the EU’s treatment of Chinese firms in sectors including wind power, photovoltaics, security equipment, and electric trains. This probe follows the EU’s use of new regulations to investigate Chinese companies competing for projects within its 27-nation bloc.

Among the EU’s concerns are allegations that Chinese subsidies provide an unfair competitive edge to wind turbine manufacturers in countries such as Spain, Greece, France, Romania, and Bulgaria. The EU has also examined Chinese bids for a 455-megawatt solar park in Romania and the procurement of 20 electric trains in Bulgaria.

In response, China has accused the EU of protectionism and distorting the definition of subsidies. The investigation by China, requested by its Chamber of Commerce for Import and Export of Machinery and Electronic Products, is expected to conclude by January 10, with a possible extension to April.

This bilateral trade conflict has seen recent escalations, with the EU imposing provisional tariffs on Chinese-made electric vehicles last week, citing unfair subsidies that allegedly disadvantage European automakers. China, in retaliation, has launched an investigation into European pork exports.

The rising Chinese auto exports, which have surged by about 30% in the first half of this year, are causing concern in both the EU and the United States. There is apprehension that the influx of affordable Chinese vehicles could disrupt domestic markets and lead to job losses in local factories.

As trade tensions continue to mount, the global economic landscape braces for potential impacts stemming from these significant disputes between China and the European Union.