China’s ministry of commerce has imposed provisional tariffs of 21.9% to 42.7% on select European Union dairy imports following an anti-subsidy investigation. The duties, effective Tuesday, largely result in rates around 30% for most companies. The ministry said it had found evidence that EU dairy imports were subsidized and hurting Chinese producers.
The European Commission has condemned the move as unjustified and based on inadequate evidence. Officials maintain that the investigation relies on questionable allegations without sufficient proof. Brussels is reviewing the decision and preparing formal objections to submit to Chinese authorities.
Trade friction began in 2023 when the European Commission initiated an investigation into Chinese electric vehicle subsidies. China’s ministry of commerce said negotiations over the bloc’s EV tariffs resumed this month, though talks were scheduled to end last week with no announcement since. A senior European diplomat in Beijing said major issues remained between the two sides.
Approximately 60 companies face the new tariffs at varying rates. Arla Foods, the owner of brands such as Lurpak and Castello, will pay tariffs between 28.6% and 29.7%. Italy’s Sterilgarda Alimenti will pay the lowest rate of 21.9%, while FrieslandCampina Belgium and FrieslandCampina Nederland will pay the highest rate of 42.7%. Companies that did not participate in the investigation will pay the highest rate.
The decision is likely to be welcomed by Chinese producers grappling with excess supply and declining prices. Falling birthrates and budget-conscious consumers have weakened demand. China imported $589 million of dairy products covered by the investigation last year. Authorities urged producers last year to curtail output and reduce older, less productive cows.