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China will impose provisional duties of up to 42.7% on certain dairy products imported from the EU from Tuesday after concluding the first phase of an anti-subsidy investigation widely seen as retaliation for the bloc’s electric vehicle tariffs.
The tariffs will range from 21.9% to 42.7% – although most companies will pay about 30% – and target products such as milk and cheese, including protected origin brands such as French roquefort and Italian gorgonzola.
The European Commission attacked the decision as “unjustified and unwarranted” and said it was examining it and would provide comments to the Chinese authorities.
“The commission’s assessment is that the investigation is based on questionable allegations and insufficient evidence, and that the measures are therefore unjustified and unwarranted,” the spokesperson Olof Gill said.
Monday’s determination is provisional and could be revised when a final ruling is made. China significantly lowered provisional tariffs on pork in its final decision last week.
Trade tensions with the EU erupted in 2023 when the European Commission – which oversees the bloc’s trade policy – launched an anti-subsidy investigation into Chinese-made electric vehicles.
Beijing has imposed tariffs on imports of EU brandy, pork and now dairy, measures seen as retaliatory. However, as it did with pork, Beijing has reduced or limited the impact of its tariffs several times, including partly sparing the major cognac producers Pernod Ricard, LVMH and Rémy Cointreau after its brandy investigation.
China’s ministry of commerce said negotiations over the bloc’s EV tariffs resumed this month. However, the talks were scheduled to end last week and there has been no announcement since.
A senior European diplomat in Beijing said last week that major issues remained between the two sides.
China imported $589m (£438m) of dairy products covered by the current investigation last year, similar to 2023 values.
China’s ministry of commerce said in a statement it had found evidence that EU dairy imports were subsidised and hurting Chinese producers. 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 SpA will pay the lowest rate of 21.9%, while FrieslandCampina Belgium NV and FrieslandCampina Nederland BV will pay the highest rate of 42.7%.
Companies that did not participate in the investigation will pay the highest rate.
The decision is likely to be welcomed by Chinese producers who are grappling with a glut of milk and falling prices as declining birthrates and more cost-conscious consumers weigh on demand.
China, the world’s third-largest milk producer, urged producers last year to rein in output and reduce the number of older and less productive cows.
