Chinese authorities have imposed provisional anti-subsidy tariffs of 21.9% to 42.7% on certain European dairy imports starting Tuesday. The decision concludes the first phase of an investigation that most observers view as retaliation for European tariffs on Chinese electric vehicles. Most affected companies will face duties near 30%, covering products from milk to protected cheese varieties.
The European Union has strongly criticized the move, with the Commission labeling it as unwarranted and lacking proper justification. Officials argue that the investigation is based on questionable allegations without adequate evidence. Brussels is reviewing the decision and preparing to challenge it through formal channels with Beijing.
Trade tensions escalated in 2023 when Europe began investigating subsidies for Chinese EV manufacturers. China has responded with tariffs on multiple EU product categories including spirits, pork, and now dairy. However, Beijing has occasionally shown flexibility, reducing provisional tariffs in final rulings and exempting certain major companies, such as leading cognac producers.
Under the new system, about 60 companies face varying tariff rates. Arla Foods, producer of Lurpak and Castello brands, will pay 28.6% to 29.7%. Italy’s Sterilgarda Alimenti received the lowest rate at 21.9%, while FrieslandCampina’s Belgian and Dutch facilities face the highest rate of 42.7%. Non-cooperative companies automatically receive maximum tariffs.
The protective measures come as Chinese dairy producers grapple with excess supply and falling prices. Declining birthrates and more price-sensitive consumers have dampened demand. China imported $589 million worth of the affected dairy products last year. The government has encouraged domestic producers to reduce production and decrease herd sizes to stabilize the market.