China extends probe into EU dairy products as trade tussle goes on

By Ella Cao and Joe Cash

BEIJING (Reuters) -China extended on Monday its anti-subsidy investigation into European Union dairy imports by six months, one front in a wider trade war with Brussels and Washington.

Trade tensions between China and the EU erupted in 2023 when the European Commission - which oversees the bloc's trade policy - launched an anti-subsidy investigation into Chinese-made electric vehicles.

China subsequently started investigations into imports of EU brandy, pork and dairy products - widely seen as retaliation for Europe's EV move.

For dairy products, China's Ministry of Commerce said it had prolonged the period of its anti-subsidy investigation to February 21, 2026, citing the complexity of the case, which covers some EU cheese, milk and cream products.

Beijing had rolled over in June an anti-dumping investigation into European pork, of which it is also a major buyer, while in July it announced duties on EU brandy producers - though major cognac makers were spared provided they sell at or above a minimum price.

The extension of the year-old dairy probe had been expected given that more technical visits by Chinese officials were already scheduled for early September, said Alexander Anton, secretary general of the European Dairy Association, which represents the industry at EU level.

The EU dairy sector is not anticipating the type of settlement reached for brandy, given the latter's different structure as an industry led by a small number of big firms, Anton added.

In France, producers are hoping for a political resolution of the EV issue to avoid duties that could hit French dairy exports to China worth around 650 million euros ($759 million) a year, Francois-Xavier Huard, CEO of industry association FNIL, said.

In April, a European Commission spokesperson said the EU and China had agreed to look into setting minimum prices of Chinese-made EVs, instead of tariffs imposed by the EU last year.

The two sides have yet to reach a deal.

"Beijing is still hoping to come to terms with the EU on a long list of trade conflicts," said Even Rogers Pay, an analyst at Beijing-based Trivium China who specialises in agriculture.

"This investigation - along with the investigation into EU pork - are significant bargaining chips in the ongoing negotiations around the EU's tariffs on Chinese new energy vehicles," she said.

($1 = 0.8566 euros)

(Reporting by Ella Cao, Xiuhao Chen and Joe Cash; additional reporting by Gus Trompiz in Paris; Editing by Christian Schmollinger, Susan Fenton and Mark Potter)