China has announced it will impose provisional anti-subsidy duties of up to 42.7% on imports of certain dairy products from the European Union, a move widely interpreted as retaliation for the bloc's tariffs on Chinese electric vehicles.
Details of the New Tariff Structure
The new duties, which come into force from Tuesday, will range from 21.9% to 42.7%, with most companies facing a levy of around 30%. The targeted products include milk and cheese, encompassing protected origin brands such as France's Roquefort and Italy's Gorgonzola.
China's Ministry of Commerce stated it found evidence that EU dairy imports were subsidised and causing harm to domestic producers. The investigation covered imports worth approximately $589 million last year.
Company-Specific Impacts and EU Reaction
Specific tariff rates have been assigned to major European dairy firms. Italy's Sterilgarda Alimenti SpA faces the lowest rate at 21.9%, while FrieslandCampina's Belgian and Dutch entities will be hit with the highest rate of 42.7%. Arla Foods, owner of brands like Lurpak and Castello, will pay duties between 28.6% and 29.7%. Companies that did not cooperate with the investigation will automatically incur the top 42.7% rate.
The European Commission swiftly condemned the decision. A spokesperson, Olof Gill, labelled the investigation as based on "questionable allegations and insufficient evidence" and called the measures "unjustified and unwarranted". The Commission is examining the ruling and plans to submit comments to Chinese authorities.
Broader Trade Tensions and Potential Revisions
This escalation is the latest in a series of trade measures between the two economic powers. Tensions flared in 2023 when the EU launched its anti-subsidy probe into Chinese electric vehicles. In response, Beijing has sequentially imposed tariffs on EU brandy, pork, and now dairy.
However, Monday's announcement is provisional and could be revised before a final ruling, mirroring a recent pattern. Last week, China significantly reduced provisional tariffs on EU pork in its final decision. Similarly, after its brandy investigation, Beijing limited the impact for major producers like Pernod Ricard and LVMH.
Negotiations over the EU's EV tariffs reportedly resumed this month but concluded last week without a publicised breakthrough. A senior European diplomat in Beijing noted that major issues remain unresolved.
The tariffs may offer some relief to Chinese dairy farmers, who are contending with a milk surplus and falling prices driven by declining birth rates and cost-conscious consumers. China, the world's third-largest milk producer, had previously urged its industry to curb output.
