China Finds Evidence of EU Dairy Subsidies Harming Domestic Producers

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 near 30%. The decision follows an investigation that China says found evidence EU dairy imports were subsidized and hurting Chinese producers.
European officials have strongly criticized the tariffs as unwarranted and lacking proper foundation. The Commission’s assessment indicates the investigation is based on questionable allegations without adequate evidence. Brussels is conducting a detailed review and preparing formal objections for Chinese authorities.
The current friction stems from the 2023 European Commission investigation into Chinese electric vehicle subsidies. China has retaliated with tariffs on European brandy, pork, and now dairy products. Despite maintaining pressure, Beijing has occasionally demonstrated flexibility by reducing final tariffs below provisional levels and exempting certain major companies.
Approximately 60 companies face the new tariffs at varying rates based on cooperation. Arla Foods will pay between 28.6% and 29.7%. Sterilgarda Alimenti from Italy secured the most favorable rate at 21.9%, while FrieslandCampina’s Belgian and Dutch operations face the steepest penalties at 42.7%. Non-participating companies automatically receive maximum tariffs.
The protective measures arrive as Chinese dairy producers grapple with surplus production and declining profitability. Reduced birthrates and increasingly price-conscious consumers have dampened demand. China imported approximately $589 million in affected dairy products last year. The government has encouraged domestic producers to curtail production and reduce the number of older, less productive cattle to stabilize prices.