China to Slap Taxes on EU Potato Starch

China said on May 16, 2011 it would levy anti-subsidy duties of up to 11.19 percent on imports of EU potato starch, in apparent retaliation over Brussels' decision to slap taxes on Chinese fine art paper.

The commerce ministry said in a statement that importers of potato starch will have to pay a deposit from May 19, 2011 based on the alleged European Union subsidy rates of 7.7 to 11.19 percent of the import price.

French starch producer Roquette and AVEBE of the Netherlands are among the companies affected by the decision, the statement said.

The taxes are to be imposed on top of anti-dumping duties of 12.6 to 56.7 percent which the ministry started to levy from last month.

On May 14, 2011, the European Commission announced its final ruling to impose countervailing tariffs, ranging from four to 12 percent, and anti-dumping duties of eight to 35.1 percent on Chinese coated fine paper.

The move "severely hurt the interests of Chinese enterprises," Chinese commerce ministry spokesman Yao Jian said on May 14, 2011 in a statement.

"China is strongly discontent with the EU's wrong decision and firmly opposes it."

"China... reserves the right to take relevant actions according to the law to protect the legitimate rights and interests of Chinese enterprises," he said.

EU-China trade has exploded in recent years, making the EU the top destination for Chinese exports while China is Europe's second-biggest trade partner after the United States.

The two sides have been at loggerheads over a string of issues ranging from metal fasteners to modems to ceramic tiles.