China Slaps Heavy Tariffs on European Dairy Products in Trade War Escalation

China has announced provisional tariffs ranging from 21.9% to 42.7% on select European Union dairy imports, effective Tuesday. The decision follows an anti-subsidy investigation that many observers interpret as direct retaliation for the EU’s recent electric vehicle tariffs. Most companies will face duties around 30%, targeting products including milk, cheese, and protected designation cheeses like French roquefort and Italian gorgonzola.
The European Commission has strongly condemned the move, calling it “unjustified and unwarranted.” Spokesperson Olof Gill stated that the investigation relies on questionable allegations and insufficient evidence. The Commission is currently reviewing the decision and preparing to submit formal comments to Chinese authorities, challenging the basis for these new trade barriers.
This latest development represents another chapter in escalating trade tensions that began in 2023 when the European Commission launched an anti-subsidy investigation into Chinese-made electric vehicles. Since then, Beijing has imposed tariffs on multiple EU products, including brandy and pork, though it has occasionally moderated these measures. Notably, China partially exempted major cognac producers and significantly reduced pork tariffs in its final ruling last week.
Approximately 60 companies will be affected by the new tariffs, with rates varying by producer. Arla Foods, which owns popular brands like Lurpak and Castello, will pay between 28.6% and 29.7%. Italy’s Sterilgarda Alimenti faces the lowest rate at 21.9%, while FrieslandCampina’s Belgian and Dutch operations will pay the maximum 42.7%. Companies that didn’t participate in the investigation automatically receive the highest tariff rate.
The tariffs come at a strategic time for Chinese dairy producers, who are struggling with oversupply and declining prices. Falling birthrates and increasingly budget-conscious consumers have dampened domestic demand. Last year, China imported $589 million worth of the affected dairy products. Chinese authorities had previously urged domestic producers to reduce output and cull older, less productive cattle to address the market imbalance.