EU set to open investigation into Chinese dumping

Today is the deadline for Metex, a French firm, to close its lysine factory.

French company Metex has accused China of flooding the European market with lysine, an amino acid that is used primarily as an additive for animal feeds, particularly for poultry. In response to the allegations, the European Commission launched an investigation into Chinese imports of lysine.

Metex’s factory – the only one in Europe that produces lysine – faces the threat of closure as it deals with a dire financial situation due to rising production costs and competition with Chinese imports. In response to the EU’s investigation into China’s trading practices, Beijing has launched its own probe into polyoxymethylene copolymer, a chemical exported to China by the EU and USA.

The French government and Metex’s business partners like Bpifrance are likely to play a major role in supporting Metex to keep the company afloat. In the short term, expect the Paris Commercial Court or another French court to announce recovery procedures and restructuring efforts for Metex. The EU investigation into China’s trade practices may lead to tariffs and other restrictions to limit imports of lysine from China. China will likely respond with similar trade barriers. In the longer term, expect tit-for-tat probing and investigations for chemicals as part of a broader trade conflict between China and the EU.