China has announced the extension of countervailing tariffs on dairy imports from the European Union, intensifying trade frictions between Beijing and Brussels and adding further pressure to global dairy markets already grappling with weak demand and geopolitical uncertainty.
According to China’s Ministry of Commerce, the tariffs will come into effect on Tuesday and apply to a broad range of EU dairy products. The decision follows a subsidy investigation launched in August 2024, examining whether financial support provided to European dairy producers unfairly harmed China’s domestic dairy industry.
Findings of the Subsidy Investigation
Chinese authorities scrutinised support mechanisms under the EU’s Common Agricultural Policy (CAP), alongside additional aid extended by individual member states. These included direct income payments, price support schemes and other forms of production-linked assistance.
The investigation assessed whether such subsidies enabled EU producers to sell dairy products in China at lower prices, expand market share, or erode the profitability of Chinese dairy companies. Based on provisional findings, Beijing concluded that these measures had distorted competition in the domestic market.
Differential Tariff Rates
Under the ruling, EU dairy exporters that cooperated with the investigation, by submitting detailed data and responding to the official questionnaire,s will face a tariff rate of 28.6 per cent. Firms that did not cooperate have been assigned a significantly higher tariff of 42.7 per cent, a penalty Chinese authorities described as standard practice in trade-remedy cases.
This differentiation underscores Beijing’s increasing use of trade compliance mechanisms to influence exporter behaviour, while also raising costs for EU dairy suppliers seeking access to the Chinese market.
Part of a Broader Trade Dispute
The dairy tariffs form part of a wider escalation in China–EU trade tensions. In recent months, China has initiated multiple investigations into EU agricultural products, while the European Union has moved to restrict imports of Chinese electric vehicles, citing unfair state support.
Earlier reports also indicated Beijing’s intention to impose tariffs on EU pork imports, suggesting that agricultural trade has become a focal point in the broader geopolitical and economic standoff.
EU Response and Market Implications
The European Commission expressed concern over China’s decision, stating that it is reviewing the legal and factual basis of the investigation. EU officials reiterated their intention to engage with Chinese authorities, while emphasising the bloc’s commitment to stable and predictable trade and investment relations.
For the global dairy industry, the move adds another layer of uncertainty. China remains a critical import market, and higher tariffs on EU dairy products could lead to trade diversion, intensify competition from other exporting regions, and further reshape international dairy trade flows.
