Chinese authorities have announced provisional tariffs of up to 42.7% on certain European Union dairy imports following an anti-subsidy investigation. The measures, effective Tuesday, range from 21.9% to 42.7%, with most companies paying around 30%. The decision is widely seen as retaliation for EU electric vehicle tariffs.
The European Commission has rejected the tariffs as illegitimate and poorly substantiated through spokesperson Olof Gill. Gill stated that 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. Brussels is examining the decision and will provide comments to Chinese authorities.
Trade friction escalated in 2023 when Europe began investigating subsidies for Chinese electric vehicle manufacturers. China has responded with tariffs on multiple European products including spirits, pork, and dairy. However, Beijing has occasionally shown flexibility, reducing provisional tariffs in final rulings and exempting certain major producers.
Approximately 60 companies will face the new tariffs at varying rates. Arla Foods will pay between 28.6% and 29.7%. Sterilgarda Alimenti secured the most favorable rate at 21.9%, while FrieslandCampina’s Belgian and Dutch operations must pay 42.7%. Non-cooperative companies automatically receive the highest tariff.
Chinese dairy producers stand to benefit as they grapple with oversupply and declining prices. Declining birthrates and more cost-conscious consumers have weakened demand. Last year, China imported $589 million in affected dairy products. Authorities have encouraged domestic producers to curtail production and reduce livestock numbers to stabilize the market.