BarcelonaTrade tensions between China and the European Union are escalating. China’s Ministry of Commerce announced on Monday the imposition, starting tomorrow, of provisional tariffs ranging from 21.9% to 42.7% on dairy imports from the European Union. This decision follows a preliminary determination, as explained by the ministry, that state subsidies received by the EU caused “substantial harm” to the Chinese dairy industry. Following an investigation launched in August 2014 at the request of the China Dairy Association and the China Dairy Industry Association, Beijing has preliminarily determined that imported dairy products originating from the European Union “were subsidized,” causing “substantial harm” to the industry and establishing a causal link between the subsidies and that harm.
Thus, China is taking a significant step with tariffs starting December 23. The affected dairy products include fresh cheese and curd, processed cheese (grated or powdered), blue cheese and other pasteurized cheeses, milk, and cream. Tariffs will range from 21.9% for the Italian company Sterilgarda Alimenti to 42.7% for some subsidiaries of the Dutch company Friesland Campina. According to an official from China’s Ministry of Commerce, while the tariffs range from 21.9% to 42.7%, “the tax rate for other EU companies that cooperated with the investigation is uniformly 28.6%, and for those that did not cooperate, it is uniformly 4%.”
In the case of affected Spanish companies such as Campo de San Juan, CAPSA, Innolact, Lácteos Industriales Agrupados, and Industrias Lácteas de Mollerusa, the provisional tariff will be 28.6%. Regarding Catalonia, while awaiting exact figures, the Catalan Ministry of Agriculture and Livestock maintains that Catalonia “exports very few dairy products,” so the impact is expected to be minimal.
However, the latest available data from the Spanish government on dairy exports is from 2024 and points to China as the second country where the most Spanish cream is exported, 10,748 tons; and the ninth in which the most butter is exported, a total of 217.1 tons.
Trade tensions are rising
In response to the news, the European Commission stated that it notes these new tariffs with “concern.” “The European Commission’s assessment is that the investigation is based on questionable allegations and insufficient evidence, and that the measures are therefore unjustified,” said Olof Gill, the Commission’s trade spokesperson, at a press conference.
Thus, the European Commission notes “with concern” the announcement from Beijing and will now take the necessary time to assess the preliminary findings of the Chinese authorities and submit its formal comments in response.
This measure comes on top of the final decision announced last week by China against the EU’s pork sector, which entails the imposition, starting December 17, of anti-dumping tariffs ranging from 4.9% to 19.8% on imports of pork and other pork products from the European bloc. The tariffs ultimately applied represent a reduction from the range of up to 62.4% that Beijing had been provisionally implementing since September on imports of a variety of European pork products.