China has concluded the first phase of an anti-subsidy investigation by imposing provisional tariffs between 21.9% and 42.7% on European dairy imports. The measures, effective from Tuesday, predominantly result in duties around 30% for most companies. The decision is widely seen as retaliation for EU electric vehicle tariffs.
Brussels has strongly objected to the decision, calling it unjustified and based on insufficient evidence. The European Commission maintains that the investigation relies on questionable allegations without adequate proof. Officials are reviewing the tariffs and preparing a comprehensive response.
These tariffs represent the latest development in a trade confrontation that started in 2023 when Europe began investigating Chinese EV subsidies. Beijing has responded with tariffs on various EU exports. Monday’s determination is provisional and could be revised when a final ruling is made. China significantly lowered provisional tariffs on pork in its final decision last week, demonstrating potential flexibility.
The tariff structure affects approximately 60 companies with differentiated rates. Arla Foods will pay between 28.6% and 29.7%. Sterilgarda Alimenti from Italy secured the most favorable rate at 21.9%, while FrieslandCampina’s Belgian and Dutch operations face the steepest penalties at 42.7%. Non-participating companies automatically receive maximum tariffs.
The protective measures arrive as Chinese dairy producers struggle with surplus production and declining profitability. Falling birthrates and budget-conscious consumers have reduced demand. Last year, China imported $589 million in affected dairy products. The government has urged domestic producers to scale back output and reduce the number of older, less productive cattle.