Beijing will slap tariffs of up to 42.7% on EU dairy products, citing unfair subsidies and escalating a tit-for-tat trade dispute triggered by EU action on Chinese electric vehicles. China’s Commerce Ministry announced on Monday that the duties, which take effect Tuesday, will apply to dairy imports including milk, cheese, and cream from the European Union.
The move follows a broader trade dispute between the two sides. Last year, the European Union investigated Chinese subsidies for electric vehicles and imposed tariffs of up to 45.3% on China-made EVs. China responded by opening its own probe in August 2024 into EU support for dairy and other agricultural products. The investigation examined subsidies under the EU’s Common Agricultural Policy as well as direct payments and price support from individual member states.
Chinese authorities assessed whether these subsidies caused “material injury” to the domestic dairy sector by lowering prices, increasing EU market share, or reducing the profitability of local producers. Based on preliminary findings, Beijing concluded that EU support had distorted competition, leading to the imposition of provisional countervailing duties.
The tariffs are tiered, reflecting companies’ cooperation with the investigation. EU producers that cooperated fully received a 28.6% tariff, while those that refused to provide information or participate in the probe face the maximum 42.7% rate. China said this approach encourages transparency and prevents firms from gaining an unfair advantage by withholding data. Such graduated tariffs are common in anti-subsidy cases but are often criticised as coercive, particularly when launched amid broader political tensions.
The European Commission, which represents all 27 EU member states in trade matters, expressed concern over the measures. Commission spokesperson Olof Gill said, “The assessment is that the investigation is based on questionable allegations and insufficient evidence, and that the measures are therefore unjustified and unwarranted.” The commission is reviewing the rationale and intends to provide formal feedback to Chinese authorities.
The dairy tariffs follow other recent Chinese countermeasures against the EU, including duties on pork imports of up to 19.8% and up to 34.9% on brandy, including cognac from France. Beijing has accused EU exporters of dumping products at low prices and harming domestic industries, while highlighting the EU’s longstanding trade deficit with China, which exceeded €300 billion last year.
Gill reiterated the EU’s commitment to strong trade and investment ties with China but stressed the need for Beijing to address structural concerns, including overcapacity, unfair use of trade instruments, and trade imbalances.
The new tariffs add another layer to an already tense EU–China trade relationship, signalling that disputes over subsidies and market access are likely to remain a central issue in transcontinental commerce.
