China’s Ministry of Commerce Completes First Phase of Dairy Tariff Investigation

Beijing has concluded the initial phase of its anti-subsidy investigation by imposing provisional tariffs between 21.9% and 42.7% on European Union dairy imports. The measures, effective from Tuesday, predominantly result in duties around 30% for most companies. Products affected range from milk and cheese to premium protected designation varieties from France and Italy.
European authorities have strongly contested the decision, describing it as unwarranted and lacking legitimate basis. The Commission’s assessment indicates that the investigation relies on questionable allegations without adequate supporting evidence. Brussels is currently reviewing the tariffs and preparing a formal response to Chinese officials.
These tariffs represent the latest development in a trade confrontation that started in 2023 when Europe began investigating Chinese EV subsidies. China has retaliated with tariffs on European spirits, pork, and now dairy products. Despite maintaining pressure, Beijing has occasionally demonstrated flexibility by reducing final tariffs below provisional levels and exempting major producers in some sectors.
Approximately 60 European dairy companies face the new tariffs at varying rates. Arla Foods, which owns brands like Lurpak and Castello, will pay between 28.6% and 29.7%. Italy’s Sterilgarda Alimenti secured the most favorable rate at 21.9%, while FrieslandCampina’s operations in Belgium and the Netherlands face the steepest penalties at 42.7%. Non-participating companies automatically receive maximum tariffs.
Chinese domestic dairy producers stand to benefit as they struggle with surplus production and declining prices. Falling birthrates and increasingly price-conscious consumers have dampened demand. Last year, China imported $589 million worth of dairy products now under investigation. Authorities have previously urged domestic producers to scale back output and reduce livestock numbers to address market imbalances.