China to impose up to 42.7% provisional tariffs on EU dairy products

A Chinese paramilitary policeman stands guard at the entrance to the European Union Delegation to China compound in Beijing, China, on Oct. 14, 2023. (AP Photo/Ng Han Guan, File)

HONG KONG — China will impose up to 42.7% of provisional tariffs on dairy products including milk and cheese imported from the European Union, its Commerce Ministry said Monday.

The elevated duties, which take effect Tuesday, were based on preliminary results from an investigation opened by China’s Commerce Ministry in August 2024 as tensions between Beijing and Brussels flared. Beijing reviewed subsidies provided by EU countries for their dairy and other farm products.

Beijing’s probe was launched as part of tit-for-tat measures as the EU investigated Chinese subsidies on electric vehicles, and later imposed tariffs as high as 45.3% on China-made EVs.

China had initiated other probes into European brandy and pork imports as counter measures for the EU’s tariffs on Chinese EVs. It had also urged the EU to scrap its EV tariffs.

The temporary duties on EU dairy imports will range from 21.9% to 42.7%, according to the Commerce Ministry, and will cover a basket of dairy products, including fresh and processed cheese, blue cheese, milk, and cream with a fat content exceeding 10% by weight.

The ministry said preliminary findings from its investigation determined that subsidies provided by the EU and EU member states for their dairy products had damaged China’s dairy industry.

The European Commission, which manages trade talks and issues on behalf of the 27 EU member countries, expressed concern over the tariffs.

“The commission’s assessment is that the investigation is based on questionable allegations and insufficient evidence, and that the measures are therefore unjustified and unwarranted,” spokesperson Olof Gill said.

Gill told reporters that the commission is examining the reasoning behind the move and intends to provide comments to the Chinese authorities.

Beijing’s probe into EU dairy products covered subsidies given under the EU’s Common Agricultural Policy and subsidies offered to farmers by EU countries including Italy, Ireland and Finland, the Commerce Ministry said in August 2024.

China’s relationship with the EU is fractious, with the Chinese trade surplus with the EU recently coming into the spotlight. The EU runs a significant trade deficit with China, at more than 300 billion euros ($352 billion) last year.

Last week, Beijing announced it was imposing up to 19.8% tariffs on EU pork imports — significantly lower than preliminary tariffs of up to 62.4%.

It accused the EU of dumping pork and pig by-products in the country, selling them at cheap prices which in turn harmed its domestic pork industry.

In July, Beijing also announced up to 34.9% tariffs on brandy imported from the EU — including cognac from France — although several major brandy brands had received exemptions.

Gill said the EU remains committed to good trade and investment ties with China.

“But in order for that to meaningfully happen, there is a list of issues and concerns that the European Union has had going back many months and even years that we would require China to address, in terms of overcapacity, in terms of unfair use of trade instruments, in terms of trade deficit, and so on,” he said.

Chan Ho-him, The Associated Press