Beijing has concluded the first phase of an anti-subsidy investigation by imposing provisional tariffs between 21.9% and 42.7% on European dairy imports. The 20.8 percentage point spread between lowest and highest rates demonstrates participation’s significant influence on outcomes.
Brussels has strongly objected to the decision, calling it unjustified and based on insufficient evidence. The European Commission maintains that the investigation relies on questionable allegations without adequate proof. Officials are reviewing the tariffs and preparing a comprehensive response.
The dispute originated in 2023 when the European Commission launched an investigation into Chinese electric vehicle subsidies. Beijing has systematically retaliated with tariffs on European brandy, pork, and now dairy products. The substantial rate differences create clear incentives for cooperation.
The outcomes show dramatic variation. Italy’s Sterilgarda Alimenti secured 21.9% through participation, while FrieslandCampina facilities face 42.7%—nearly double. Arla Foods achieved intermediate rates of 28.6-29.7%. Companies that did not participate in the investigation automatically receive the 42.7% maximum rate, regardless of actual subsidy circumstances.
The protective measures arrive as Chinese dairy producers struggle with surplus production and declining profitability. Falling birthrates and budget-conscious consumers have reduced demand. Last year, China imported $589 million in affected dairy products. The government has urged domestic producers to scale back output.