Background on the EU and China’s Dairy Trade Relationship
The European Union (EU) and China have maintained a significant dairy trade relationship, with the EU being China’s second-largest supplier of dairy products after New Zealand. In 2023, the EU exported substantial quantities of skimmed milk powder, butter, and whole milk powder to China, making it one of the top destinations for these dairy products.
China’s Anti-Subsidy Investigation and Tariff Announcement
In August 2024, China initiated an anti-subsidy investigation into EU dairy products following a request from the Chinese Dairy Industry Association. This investigation is set to conclude in February 2025, and as a result, China announced temporary tariffs ranging from 21.9% to 42.7%. These tariffs will take effect on the following day, impacting various dairy products such as fresh cheese, processed cheese, curd, blue cheese, and certain types of milk and cream.
Impact on Specific EU Dairy Companies
The Italian company Sterilgarda Alimenti SpA will face the lowest tariff rate of 21.8%, while FrieslandCampina Belgium N.V. and FrieslandCampina Nederland B.V. will pay the highest rate of 42.7%. Around ten French companies will be subjected to a 28.7% tariff, and approximately 50 companies from Italy, France, and Germany will face a 28.6% tariff, according to China’s Ministry of Commerce.
EU’s Response and Previous Trade Tensions
The EU has contested China’s decision, stating that the investigation is based on dubious claims and insufficient evidence. The EU Commission spokesperson, Olof Gill, declared that the EU executive’s analysis concludes that the measures are unjustified and baseless.
China’s Recent Trade Actions Against the EU
This tariff announcement comes after China imposed anti-dumping tariffs on EU pig meat imports for five years. These tariffs, ranging from 4.9% to 19.8%, took effect on December 17, 2024—a reduction from the temporary tariffs between 15.6% and 62.4% that were in place since September.
China’s Moderate Approach to Trade Disputes
Despite the escalating tensions, China has shown restraint in its approach to trade disputes. A representative from the Ministry of Commerce’s Corrective Measures Department stated that China has not initiated new corrective trade investigations against the EU this year, only issuing final rulings on three anti-dumping cases affecting brandy, copolymerized formaldehyde, and pig meat.
Key Questions and Answers
- Who is most affected by these tariffs? Companies like Sterilgarda Alimenti SpA (Italy) face the lowest tariff rate of 21.8%, while FrieslandCampina Belgium N.V. and FrieslandCampina Nederland B.V. (Netherlands) face the highest rate of 42.7%. French, Italian, and German companies also face tariffs ranging from 28.6% to 28.7%.
- Why is the EU contesting these tariffs? The EU Commission claims that China’s investigation is based on dubious allegations and insufficient evidence, deeming the measures unjustified and baseless.
- What other trade tensions exist between the EU and China? In 2023, the EU initiated an anti-subsidy investigation into Chinese electric vehicles, prompting China to investigate EU imports of brandy, pig meat, and dairy products in retaliation.
