$589 Million European Dairy Export Market to China Faces New Barriers

Beijing has announced provisional anti-subsidy tariffs of up to 42.7% on European Union dairy products effective Tuesday. The duties range from 21.9% to 42.7%, with most companies paying around 30%. The measures follow an investigation widely interpreted as retaliation for EU electric vehicle tariffs and target various dairy products including protected origin cheeses.
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. The Commission is examining the decision closely and preparing formal objections to submit to Chinese authorities.
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 shown some pragmatism, occasionally reducing provisional tariffs in final decisions and exempting certain major producers.
Approximately 60 companies will face the new tariffs at varying rates based on cooperation. Arla Foods will pay 28.6% to 29.7%. Italy’s Sterilgarda Alimenti secured the most favorable rate at 21.9%, while FrieslandCampina’s Belgian and Dutch facilities face the maximum 42.7%. Non-participating companies automatically receive the highest tariff.
Chinese dairy producers are likely to welcome these measures as they grapple with oversupply and falling prices. Declining birthrates and budget-conscious consumers have weakened demand. Last year, China imported $589 million worth of dairy products now covered by the investigation. Authorities have encouraged domestic producers to scale back output and reduce older, less productive cattle.