Chinese authorities have announced provisional tariffs of up to 42.7% on certain European Union dairy products starting Tuesday, following what is widely viewed as a retaliatory anti-subsidy investigation. The duties, which will average around 30% for most companies, apply to various dairy items including milk, cheese, and prestigious protected origin products from France and Italy.
Brussels has dismissed the tariffs as lacking legitimate foundation. The European Commission’s assessment indicates that China’s investigation relies on dubious allegations without sufficient supporting evidence. Officials are currently conducting a detailed review and will formally communicate their objections to Beijing.
The current friction stems from the European Commission’s 2023 decision to investigate subsidies for Chinese electric vehicle manufacturers, which oversees the bloc’s trade policy. China has responded with tariffs on multiple European products, including spirits, meat, and dairy. Despite this aggressive posture, Beijing has occasionally moderated its stance, as seen when it reduced pork tariffs in its final decision and partially exempted major French cognac brands.
Under the new tariff regime, approximately 60 companies will face varying rates based on their cooperation with the investigation. Arla Foods, responsible for well-known brands like Lurpak and Castello, will pay rates ranging from 28.6% to 29.7%. Sterilgarda Alimenti from Italy secured the most favorable terms at 21.9%, while FrieslandCampina’s operations in Belgium and the Netherlands must pay the maximum 42.7%.
These protective measures arrive as Chinese dairy producers struggle with oversupply and declining profitability. Reduced birthrates and more frugal consumer behavior have suppressed demand for dairy products domestically. Last year, China imported $589 million in dairy products now covered by the investigation. The government previously urged producers to curtail production and reduce livestock numbers to address market imbalances.