EU Warns 'China Must Adapt' as Probe Starts on 'Russian Plywood'

European Council president Charles Michel met on Friday with Chinese Premier Li Qiang on the sidelines of the ASEAN summit in Vientiane and issued a warning to his counterpart during “frank and candid” talks.

China must “adapt its behaviour” if it wants to solve the escalating tariff row with Europe over electric vehicles, he told reporters in Laos, adding that he hoped a deal could be struck in the coming days or weeks, but said achieving it would be tough.

“I have the impression that the door is not closed, but it’s a very difficult situation, it’s very challenging,” he told AFP.

“We count on China to adapt its behaviour and to understand that we have to rebalance the economic relationships for more fairness, for fair competition, for a more level playing field.”

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European Council president Charles Michel, seen here meeting President Xi Jinping in late 2022, says Europe will not be naive about China’s massive subsidies (Reuters image).

Earlier, the Chinese PM told Michel that Beijing was “willing to continue to work with EU leaders to further consolidate the stable and positive momentum of China-EU relations”

EU to probe ‘Russian plywood’ from China

Meanwhile, the European Union has opened a further front in its trade disputes with China – investigating the alleged dumping of cheap plywood, amid suspicion a lot of the hardwood comes from Russia, according to the FT.

EU producers say there has been a surge in cheap plywood coming from China, “much of which they believe originates in Russia,” the report said. Brussels banned wood imports from Russia after it invaded Ukraine in February 2022.

The move – the second this year involving plywood suspected to originally come from Russia – follows the EU voting last week to impose hefty tariffs of up to 45% on electric vehicles (EVs) made in China.

Beijing has hit back by imposing a 38% tariff on brandy exports from the EU and has also opened ‘anti-dumping’ investigations into pork and dairy products from Europe.

China and the EU have filed numerous complaints with the World Trade Organization and Brussels has opened more than a dozen investigations into subsidies for solar panels, wind turbines, plus products such as monosodium glutamate and tin plate.

Amid rising tensions, there is now concern that the dispute over Chinese EVs will intensify into a fully fledged trade war, with more retaliatory moves on key products.

‘Cheap conflict timber’

Meanwhile, Greenwood Consortium, which acts on behalf of thousands of forest owners, loggers and suppliers to producers in countries such as Poland, Finland, Baltic states and France, has said the EU investigation is crucial to protect Europe’s plywood supply chain.

“Unfairly priced Chinese imports — now apparently also using cheap conflict Russian timber that is banned in the EU — threaten the survival of many European businesses and jobs.”

The EU imported about 750,000 cubic metres of hardwood plywood worth about $357 million in 2023. Plywood is used in rooves, walls and floors, plus furniture, as well as ships and cars, as it can manage very low temperatures.

In May, the European Commission imposed anti-dumping measures on imports of birch plywood from Russia to imports from Kazakhstan and Turkey.

That followed an eight-month investigation which concluded that imports of birch plywood from Russia were being sent to Kazakhstan and Turkey, or relayed for final completion in these countries, before the finished products were shipped to the EU.