China to impose up to 42.7% provisional tariffs on EU dairy products

China Slaps Hefty Tariffs on EU Dairy Products as Trade Tensions Escalate

China announced Monday it will impose tariffs of up to 42.7% on dairy products imported from the European Union, significantly raising costs for European cheese, milk, and cream entering the Chinese market. The new duties take effect Tuesday following a preliminary investigation launched by China’s Commerce Ministry in August.

The temporary tariffs will range from 21.9% to 42.7% and cover a wide range of products, including fresh and processed cheese, blue cheese, milk, and cream with fat content exceeding 10% by weight. According to Chinese officials, their investigation determined that EU subsidies had caused damage to China’s domestic dairy industry.

The move marks the latest development in escalating trade tensions between Beijing and Brussels. The dairy investigation was initiated shortly after the EU imposed tariffs of up to 45.3% on Chinese electric vehicles, having concluded that Chinese manufacturers benefited from unfair state subsidies.

European Commission spokesperson Olof Gill expressed concern over China’s decision, describing the investigation as “based on questionable allegations and insufficient evidence.” Gill told reporters the Commission is examining China’s reasoning and plans to provide comments to Chinese authorities.

“The measures are therefore unjustified and unwarranted,” Gill stated, while reaffirming the EU’s commitment to maintaining good trade relations with China.

Beijing’s investigation specifically targeted subsidies provided under the EU’s Common Agricultural Policy as well as support offered to farmers by individual EU member states, including Italy, Ireland, and Finland.

This is not China’s first retaliatory measure against European imports. Last week, Beijing announced tariffs of up to 19.8% on EU pork imports – though significantly lower than the preliminary rates of up to 62.4% initially proposed. Chinese authorities accused European producers of dumping pork and pig by-products in China at artificially low prices, harming domestic producers.

In July, China also imposed tariffs of up to 34.9% on European brandy, including France’s prized cognac exports, though several major brands received exemptions.

The widening trade conflict highlights the increasingly strained economic relationship between China and the EU. Last year, the EU recorded a trade deficit with China exceeding 300 billion euros ($352 billion), a significant imbalance that has become a point of contention for European officials.

The dairy sector is particularly important for several EU economies. Countries like Ireland, the Netherlands, Denmark, and France rely heavily on dairy exports, with China representing a growing market for premium European cheese and milk products.

Agricultural analysts suggest the tariffs could significantly disrupt established supply chains and potentially redirect European dairy exports to alternative markets, creating ripple effects throughout the global dairy industry.

For Chinese consumers, the tariffs may translate to higher prices for imported European dairy products, potentially benefiting domestic producers but limiting consumer choice in the growing Chinese dairy market.

Gill noted that meaningful improvement in EU-China trade relations would require addressing several long-standing concerns, including “overcapacity, unfair use of trade instruments, trade deficit, and so on.”

The trade dispute occurs against a backdrop of broader geopolitical tensions, as Western nations increasingly seek to reduce economic dependencies on China while Beijing pursues policies to strengthen its domestic industries and reduce reliance on foreign technology and products.

As both sides continue to leverage trade measures as diplomatic tools, economists warn that further escalation could harm global supply chains and economic growth at a time when the world economy faces multiple challenges.