China’s commerce ministry launched an anti-dumping investigation into imports of a widely used production chemical from the European Union on Saturday, less than a week before the bloc’s trade chief was due in Beijing for talks.

A spokesperson for Beijing’s commerce ministry said China’s domestic industry had requested the investigation into whether imports from the EU of low-priced p-nitrotoluene were flooding the Chinese market, complaining of “damage to production and operations”.

The chemical is used in the production of dyes, pharmaceuticals, and pesticides.

Simmering trade tensions between Beijing and Brussels have threatened to become a full-blown trade war as the 27-nation bloc scrambles to defend its industries against a flood of Chinese exports critics argue are supported by vast subsidies.

Beijing rejects that its manufacturers’ competitiveness is based on state support and has threatened countermeasures against EU moves to block its firms.

Maros Sefcovic, the EU’s trade commissioner, and Chinese commerce minister Wang Wentao will hold critical talks on Thursday aimed at avoiding an escalation of tit-for-tat trade measures.

In September, the EU began an investigation into polyvinyl chloride imports from countries including China.

China’s newly launched investigation will conclude within 12 months, with the possibility of a six-month extension, the ministry said.

“China has repeatedly reiterated that the EU needs to face its own economic and trade problems directly and resolve mutual concerns through dialogue and consultation,” the spokesperson added.