Beijing has announced provisional anti-subsidy tariffs of 21.9% to 42.7% on European Union dairy products starting Tuesday. Most affected companies will face duties around 30%. The decision follows an investigation seen as retaliation for EU tariffs on Chinese electric vehicles.
The European Commission has rejected the tariffs as illegitimate and poorly substantiated. Officials argue that the investigation is based on questionable claims and insufficient evidence. Brussels is examining the decision closely and preparing formal comments to challenge the findings.
Trade tensions escalated in 2023 when Europe began investigating subsidies for Chinese electric vehicle manufacturers. China has responded with tariffs on multiple European products including spirits, pork, and dairy. However, Beijing has occasionally shown flexibility, reducing provisional tariffs in final rulings.
About 60 companies, including 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.
Chinese dairy producers are likely to welcome these measures as they grapple with oversupply and declining prices. Declining birthrates and more cost-conscious consumers have weakened demand. Last year, China imported $589 million in affected dairy products. Authorities have encouraged domestic producers to curtail production and reduce the number of older, less productive cattle to stabilize prices.