China has announced provisional anti-subsidy tariffs on European dairy products ranging from 21.9% to 42.7%, with implementation beginning Tuesday. Most companies will pay duties around 30%. The measures follow an investigation widely seen as retaliation for EU electric vehicle tariffs and target products including milk, cheese, and protected origin specialties.
The European Commission has rejected the tariffs as illegitimate and poorly justified. Officials maintain that the investigation is based on questionable claims and lacks sufficient evidence. The Commission is examining the decision and will provide formal comments to Chinese authorities challenging the findings.
The trade dispute traces back to 2023 when the European Commission launched an investigation into Chinese electric vehicle subsidies. Beijing has responded with systematic tariffs on European exports including brandy, pork, and dairy. However, China has occasionally softened its stance, reducing tariffs in final decisions and partially exempting major companies like French cognac producers.
The new tariff framework creates differentiated rates for about 60 companies. Arla Foods will pay between 28.6% and 29.7%. Sterilgarda Alimenti from Italy received the lowest rate at 21.9%, while FrieslandCampina’s Belgian and Dutch facilities must pay the maximum 42.7%. Companies that refused to participate in the investigation face automatic maximum penalties.
These protective measures arrive as Chinese dairy producers grapple with oversupply and declining profitability. Reduced birthrates and budget-conscious consumers have weakened demand. China imported approximately $589 million in affected dairy products last year. The government has encouraged domestic producers to curtail production and reduce the number of older, less productive cattle to stabilize prices.