Chinese authorities have announced provisional tariffs of up to 42.7% on certain European Union dairy imports following an anti-subsidy investigation. The measures, effective Tuesday, range from 21.9% to 42.7%, with cooperation levels significantly affecting individual company outcomes.
The European Commission has rejected the tariffs as illegitimate and poorly substantiated. Officials maintain that the investigation is based on questionable allegations without sufficient supporting evidence. Brussels is examining the decision and preparing formal comments.
Trade friction escalated in 2023 when Europe began investigating subsidies for Chinese electric vehicle manufacturers. China has responded with tariffs on multiple European products. However, Beijing has occasionally shown flexibility, reducing provisional tariffs in final rulings and rewarding cooperative companies.
Approximately 60 companies will face the new tariffs at varying rates based on their level of cooperation with the investigation. Italy’s Sterilgarda Alimenti SpA will pay the lowest rate of 21.9%, demonstrating the benefits of investigation participation. Arla Foods will pay between 28.6% and 29.7%, while FrieslandCampina Belgium and FrieslandCampina Nederland will pay the highest rate of 42.7%. Companies that did not participate automatically receive maximum penalties.
Chinese dairy producers stand to benefit 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 livestock numbers to stabilize prices.