China has announced provisional tariffs of up to 42.7 per cent on selected dairy products imported from the European Union, escalating trade tensions between Beijing and Brussels.
The move follows the conclusion of the first phase of an anti-subsidy investigation into EU dairy exports and is widely seen as retaliation for the EU’s earlier action against Chinese electric vehicle imports, reported Guardian.
The duties, which come into force from Tuesday, range between 21.9 per cent and 42.7 per cent, with most affected companies facing levies of around 30 per cent. Products under the scanner include milk and cheese, notably protected-origin varieties such as French roquefort and Italian gorgonzola.
Why China Has Targeted Dairy Products
According to China’s Ministry of Commerce, the investigation found evidence that dairy imports from the EU were subsidised and had caused harm to domestic producers. Around 60 companies will be affected by the provisional measures. Firms including Arla Foods, which owns brands such as Lurpak and Castello, will face tariffs ranging between 28.6 per cent and 29.7 per cent.
Italy’s Sterilgarda Alimenti SpA has been assigned the lowest provisional tariff of 21.9 per cent, while FrieslandCampina Belgium NV and FrieslandCampina Nederland BV will pay the highest rate of 42.7 per cent. Companies that did not participate in the investigation will automatically be subjected to the top tariff band.
China imported dairy products worth $589 million that fall under the current investigation last year, a figure broadly unchanged from 2023.
EU Pushes Back, Calls Move Unjustified
The European Commission reacted sharply, describing the tariffs as “unjustified and unwarranted”. Commission spokesperson Olof Gill said Brussels was examining the decision and would formally respond to Chinese authorities.
“The commission’s assessment is that the investigation is based on questionable allegations and insufficient evidence, and that the measures are therefore unjustified and unwarranted,” Gill said.
The determination announced on Monday remains provisional and could be revised when China issues its final ruling. A similar pattern was seen in the pork sector, where Beijing significantly lowered provisional tariffs in its final decision last week.
A Broader Trade Dispute Over EVs
Trade friction between China and the EU has been simmering since 2023, when the European Commission launched an anti-subsidy probe into Chinese-made electric vehicles. Since then, Beijing has imposed tariffs on EU brandy, pork and now dairy, moves widely interpreted as countermeasures.
However, China has also shown flexibility in previous cases. During its brandy investigation, Beijing reduced or limited the impact of tariffs, partly sparing major cognac producers such as Pernod Ricard, LVMH and Rémy Cointreau.
China’s Ministry of Commerce said negotiations on the EU’s EV tariffs resumed earlier this month, though talks were expected to conclude last week. No official update has been issued so far, and a senior European diplomat in Beijing said recently that significant differences remain unresolved.
Impact at Home: Relief for Chinese Producers
The decision is likely to be welcomed by Chinese dairy producers, many of whom are grappling with excess milk supply and falling prices. Slowing demand, driven by declining birth rates and increasingly cost-conscious consumers, has weighed heavily on the sector.
China, the world’s third-largest milk producer, urged farmers last year to rein in production and reduce the number of older, less productive cows in an attempt to stabilise prices.
As the tariffs are provisional, the final outcome will depend on Beijing’s concluding findings and the broader trajectory of EU-China trade talks. With negotiations over electric vehicle tariffs still unresolved, analysts expect dairy to remain a pressure point in an increasingly complex trade relationship.
