China has imposed provisional tariffs of 21.9% to 42.7% on select European Union dairy imports following an anti-subsidy investigation. The measures suggest China’s earlier domestic production adjustment policies proved insufficient to stabilize the dairy market alone.
The European Commission has condemned the move as unjustified and based on inadequate evidence. Officials argue that the investigation relies on questionable allegations without sufficient proof. Brussels is reviewing the decision and preparing formal objections.
Trade friction began in 2023 when the European Commission initiated an investigation into Chinese electric vehicle subsidies. Beijing has responded with tariffs on European spirits, pork, and dairy products. The timing suggests domestic measures needed supplemental import restrictions.
Approximately 60 companies face the new tariffs at varying rates based on cooperation. Italy’s Sterilgarda Alimenti faces the lowest rate at 21.9%, while Arla Foods will pay between 28.6% and 29.7%. FrieslandCampina’s Belgian and Dutch facilities must pay 42.7%. Companies that refused to participate automatically receive maximum penalties.
The decision is likely to be welcomed by Chinese producers grappling with excess supply. China, the world’s third-largest milk producer, urged producers last year to rein in output and reduce the number of older and less productive cows. Despite these efforts, falling prices and declining demand persisted, prompting the import tariffs. Last year, China imported $589 million in affected dairy products.