According to Bloomberg, the dispute involves EU imports from Egypt of glass fiber fabrics. The two Egyptian exporters of such fabrics are subsidiaries of China Jushi Co. and Zhejiang Hengshi Fiberglass Fabrics Co.

The EU noted that Jushi Egypt and Hengshi Egypt received financial benefits from the Chinese and Egyptian governments and that the aid unfairly undercut the bloc’s own producers such as Finland-based Ahlstrom-Munksjo Oyj in the European market.

In fact, th European Commission said that EU manufacturers suffered “material injury.” However, China lashed out at the EU decision, saying that it violates World Trade Organization rules.

As for the EU, it is also threatening in two other trade investigations to target alleged Chinese aid to exporters based outside China. One inquiry by the commission focuses on EU imports of glass fiber reinforcements from Egypt. The other one covers shipments of stainless steel from Indonesia to the bloc.

In its decision to impose an anti-subsidy duty on Egyptian glass fiber fabrics, the EU argues that WTO law gives the EU scope to take account of Chinese aid to Jushi Egypt and Hengshi Egypt when calculating the level of the levy on both companies. The rate is 10.9%.