China Reduces Tariffs on EU Dairy Products Amid Trade Investigation

China has lowered the proposed tariffs on certain dairy products imported from the European Union (EU) as part of the conclusion of an anti-subsidy investigation. This investigation was initiated as a response to EU levies on Chinese electric vehicle imports. According to two European industry associations, the European Dairy Association (EDA) and Eucolait, the final tariffs communicated to the European side suggest a maximum duty of 11.7%, a significant reduction from the provisional rate of 42.7% announced in December. Most companies will face a tariff of 9.5%.

The investigation covers a range of dairy products, including cream and cheese. These developments follow similar scrutiny of other products such as brandy and pork. Alexander Anton, the Secretary General of the EDA, commented, "It's a success but you're still out of the game," highlighting the continuing competitive challenges for EU dairy products in the Chinese market despite the tariff reduction.

In 2024, China imported EU dairy products worth $589 million that are now subject to the investigation. The reduced tariffs might still challenge EU products' competitiveness in China, potentially benefiting other suppliers like New Zealand. Meanwhile, the adjustment could also provide relief for Chinese producers who are dealing with an oversupply and declining milk prices amid weak demand.

Efforts to reach the European Commission and the Chinese Ministry of Commerce for comments were unsuccessful outside of working hours. The developments are significant in the context of the ongoing trade tensions between the EU and China.