China will impose tariffs of up to 42.7% on dairy imports from the European Union starting Tuesday, escalating a trade dispute linked to electric vehicle tariffs.
Government of China announced it will impose provisional tariffs of up to 42.7% on dairy products imported from the European Union, a move that further escalates trade tensions between the two major economic powers amid ongoing disputes over electric vehicles and industrial subsidies.
China’s Ministry of Commerce said the new duties will take effect on Tuesday and will affect a broad range of products, including milk, cheese and cream imported from the European Union.
The decision is based on preliminary findings from an investigation launched in August 2024, when frictions between Beijing and Brussels intensified.
During the investigation, China reviewed subsidies granted by European Union member states to their dairy industries and other agricultural sectors.
According to the ministry, the initial findings show that these subsidies harmed China’s domestic dairy industry by distorting prices and creating what Beijing described as unfair competition.
Tariffs will range from 21.9% to 42.7% and will apply to a basket of dairy products, including fresh and processed cheese, blue cheese, milk and cream with a fat content exceeding 10% by weight.
Chinese authorities said the tariff levels will vary depending on the product and the exporting country within the European Union.
The dairy investigation is part of a broader retaliatory strategy by China in response to actions taken by the European Union against Chinese-made electric vehicles.
Brussels launched an investigation into Chinese state subsidies for electric vehicles and subsequently imposed tariffs of up to 45.3% on imports of Chinese EVs.
In response, China opened additional probes into key European exports such as brandy and pork and repeatedly urged the European Union to lift its tariffs on Chinese electric vehicles.
European Commission voiced concern over Beijing’s decision. “The Commission considers that the investigation is based on questionable allegations and insufficient evidence, making these measures unjustified and unjustifiable,” said Commission spokesperson Olof Gill.
Gill told reporters that the Commission is examining the rationale behind the move and intends to submit its observations to Chinese authorities. The European Commission negotiates trade policy on behalf of the 27 member states of the European Union.
China’s Ministry of Commerce said in August 2024 that the dairy investigation covered subsidies granted under the European Union’s Common Agricultural Policy, as well as national subsidies provided by countries such as Italy, Ireland and Finland to their dairy farmers.
Trade relations between China and the European Union have become increasingly strained, with China’s growing trade surplus drawing scrutiny in Brussels. The European Union runs a significant trade deficit with China, which exceeded €300 billion last year.
Last week, Beijing announced tariffs of up to 19.8% on pork imports from the European Union, well below earlier provisional rates of up to 62.4%. In that case, China accused the EU of dumping pork and pork byproducts at artificially low prices, harming its domestic pork industry.
In July, China also imposed tariffs of up to 34.9% on brandy imports from the European Union, including French cognac, although several major brands received exemptions.
Despite the escalating dispute, Gill said the European Union remains committed to maintaining constructive trade and investment relations with China.
However, he stressed that for such relations to be meaningful, Beijing must address long-standing EU concerns, including industrial overcapacity, the perceived misuse of trade instruments and the persistent trade imbalance.
