The EU is poised to launch a trade case against China after telling member states it has compiled firm evidence that Chinese telecommunications equipment companies have benefited from illegal state subsidies. The commission has been piecing together the case for months, several officials and executives briefed on the case told the Financial Times, focusing on the activities of Huawei and ZTE. EU officials informed member states at a closed-door meeting on 24 May they believed the commission had "very solid evidence" that those companies benefited from illegal government subsidies and had sold products in the EU below cost. People briefed on the meeting said the EU's declaration appeared to be one of the final steps before bringing a formal case as soon as next month. Upon a determination China was acting illegally, the EU could subject Chinese companies to punitive tariffs. This would mark the first time that the commission has opened a trade investigation of its own accord, and not in response to a formal complaint filed by a private company or industry group.
