China has implemented provisional anti-subsidy tariffs of 21.9% to 42.7% on European Union dairy products effective Tuesday. Most affected companies will face duties around 30%. The measures follow an investigation seen as retaliation for EU electric vehicle tariffs and target products from milk to protected specialty cheeses.
Brussels has condemned the move as unjustified and based on inadequate evidence. The European Commission maintains that the investigation relies on questionable allegations without sufficient proof. Officials are reviewing the decision and preparing formal objections to submit to Chinese authorities.
The trade dispute originated in 2023 when Europe initiated an investigation into Chinese electric vehicle subsidies. Beijing has systematically responded with tariffs on European spirits, pork, and dairy products. Despite this aggressive approach, China has occasionally demonstrated flexibility by reducing final tariffs below provisional levels in some sectors.
About 60 companies face the new tariffs at varying rates based on their cooperation with the investigation. Arla Foods will pay 28.6% to 29.7%. Sterilgarda Alimenti from Italy secured the most favorable rate at 21.9%, while FrieslandCampina’s Belgian and Dutch operations face the steepest penalties at 42.7%. Companies that did not participate in the investigation will pay the highest rate automatically.
The protective measures arrive as Chinese dairy producers struggle with surplus production and declining profitability. Reduced birthrates and increasingly price-conscious consumers have dampened demand. China imported approximately $589 million in affected dairy products last year. The government has urged domestic producers to curtail production and reduce livestock numbers to address market imbalances.
