Beijing Targets European Dairy in Expanding Trade Dispute Over Electric Vehicles

China has imposed substantial tariffs on European dairy imports, with rates spanning from 21.9% to 42.7%, following the completion of an anti-subsidy investigation’s initial phase. The provisional duties, effective from Tuesday, predominantly settle around 30% for most affected companies. The move targets a broad range of dairy products, including specialty cheeses with geographical protection designations.
The European Union has rejected China’s findings, with the European Commission issuing a strong statement questioning the investigation’s methodology and evidence. Commission spokesperson Olof Gill emphasized that the measures appear unjustified based on the available information. Brussels is actively reviewing the decision and preparing a comprehensive response to Chinese authorities.
This action represents the latest volley in a trade confrontation that began when Europe launched its own investigation into Chinese EV subsidies in 2023. Beijing has responded with a series of targeted tariffs on European exports across multiple sectors. While China has maintained a tough stance, it has also demonstrated willingness to negotiate, occasionally softening its position in final rulings compared to provisional measures.
The tariff rates vary significantly depending on the company and its cooperation with Chinese investigators. Arla Foods, a major European dairy producer, faces mid-range tariffs of 28.6% to 29.7%. At the lower end, Italy’s Sterilgarda Alimenti will pay 21.9%, while FrieslandCampina’s Belgian and Dutch facilities face the steepest penalties at 42.7%. Non-participating companies are automatically assigned the highest rate.
The timing of these tariffs aligns with difficulties facing China’s domestic dairy sector. Producers are contending with excess supply and weakening prices as birthrates decline and consumers become more price-sensitive. China brought in $589 million worth of the targeted dairy products last year. Government officials have already encouraged domestic producers to scale back production and reduce herd sizes to stabilize the market.