Brussels Strikes Back at China Over Dairy Tariffs Amid Ongoing Trade Tensions

Brussels retaliated on Monday, December 22, in response to China's imposition of duties reaching as high as 427% on certain dairy products imported from the European Union. The European Commission labeled the move as unjustified. The newly imposed duty deposits, which range between 219% and 427%, are set to take effect on Tuesday. They apply to a variety of items, including fresh cheese, processed cheese, curd, blue cheese, and certain types of milk and cream, as stated by China's Ministry of Commerce. This latest tariff announcement marks a continuation of an escalating trade conflict between China and the EU, which has seen disputes emerge in various sectors, from food products to electric vehicles. The conflict escalated when Chinese officials initiated an antisubsidy investigation in August 2024, acting on a request from the Dairy Association of China. The inquiry is expected to conclude in February, but preliminary findings have allegedly shown a connection between EU subsidies and significant harm to China's domestic dairy sector. European officials have challenged these claims, asserting that the investigation rests on questionable allegations and inadequate evidence. A spokesperson for the European Commission stated, "Our assessment is that the measures are therefore unjustified and unwarranted," adding that the Commission is currently reviewing the preliminary findings and will respond to the Chinese authorities. The French dairy association FNIL, which represents major companies like Danone and Lactalis, also expressed dismay at the duties, with its chief, François-Xavier Huard, describing the decision as a shocking blow, particularly for Savencia, a prominent exporter of cheese to China that had worked closely with Chinese authorities. The issuance of these levies comes just a week after China announced its own antidumping duties on EU pork imports for a five-year duration, with rates ranging from 49% to 198%, down from previously imposed temporary levies that had been as high as 624% since September. This pattern of reciprocal tariffs highlights the growing trade rift, attributed by many European nations to what they perceive as an unbalanced economic relationship with China. The current bout of tensions ignited in 2024, when the EU suggested imposing significant tariffs on Chinese electric vehicles, citing that Beijing's subsidies unfairly undercut European competitors. In response, China launched what many analysts viewed as retaliatory investigations into various European products, including pork, brandy, and dairy. China denied the EU's allegations, stating that its actions are justified as they protect its domestic industries. The EU's trade deficit with China exceeded 350 billion euros in 2024, further complicating the situation and fueling the perception of an uneven trade dynamic. French President Emmanuel Macron, addressing the issue earlier this month, hinted that Europe may consider implementing strong measures, including tariffs, should there be no attempts made by China to rectify the trade imbalance. In addition to the trade disputes, the EU and China are also at odds over broader geopolitical issues, most notably regarding Russia's invasion of Ukraine. The EU has consistently urged China to exert influence over Moscow to terminate the conflict, yet Beijing has displayed little willingness to comply with those demands. The interplay of trade and political tensions continues to mount, reminding stakeholders of the intricate and often contentious relationship between these two economic powers. Related Sources: • Source 1 • Source 2