China hits EU dairy industry with tariffs of up to 42.7% | Food & drink industry
China will impose provisional duties of up to 42.7% on some dairy products imported from the EU starting Tuesday, after completing the first phase of its anti-subsidy investigation seen as retaliation for the bloc’s electric vehicle tariffs.
Tariffs will range from 21.9% to 42.7% (although most companies will pay around 30%) and will target products such as milk and cheese, including brands of protected origin such as French blue cheese and Italian gorgonzola.
The European Commission attacked the decision as “unfair and unfounded” and said it was reviewing the decision and would forward its comments to Chinese officials.
Spokesperson Olof Gill said: “The Commission’s assessment is that the investigation was based on dubious allegations and insufficient evidence and that the measures were therefore unjustified and unwarranted.”
Monday’s decision is provisional and may be revised when a final decision is made. With the final decision taken last week, China significantly reduced temporary customs duties on pork.
Trade tensions with the EU erupted in 2023 when the European Commission, which oversees the bloc’s trade policy, launched an anti-subsidy investigation into Chinese-made electric vehicles.
Beijing has imposed tariffs on imports of EU brandy, pork and now dairy products; these measures are seen as retaliation. But Beijing has reduced or limited the impact of its tariffs several times, as it did on pork, including partially protecting major cognac producers Pernod Ricard, LVMH and Rémy Cointreau after the brandy investigation.
China’s Ministry of Commerce said talks on the bloc’s EV tariffs resumed this month. However, the talks were scheduled to end last week and no statement has been made since then.
A senior European diplomat in Beijing said last week that significant issues remained between the two sides.
China imported $589 million (£438 million) worth of dairy products under the current investigation last year, similar to 2023 values.
China’s Ministry of Commerce said in a statement that it had found evidence that imports of dairy products from the EU were subsidized and harmed Chinese producers. About 60 companies, including Arla Foods, owner of brands such as Lurpak and Castello, will pay tariffs between 28.6 percent and 29.7 percent.
Italian Sterilgarda Alimenti SpA will pay the lowest rate at 21.9%, while FrieslandCampina Belgium NV and FrieslandCampina Nederland BV will pay the highest rate at 42.7%.
Companies that do not participate in the investigation will pay the highest rate.
The decision is expected to be welcomed by Chinese producers grappling with a milk glut and falling prices as falling birth rates and increasingly cost-conscious consumers put pressure on demand.
China, the world’s third-largest milk producer, last year called on producers to rein in production and reduce the number of older and less productive cows.
