Finance
China hits EU dairy with tariffs, broadening trade conflict
Published by Global Banking & Finance Review®
Posted on December 22, 2025
4 min readLast updated: January 20, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on December 22, 2025
4 min readLast updated: January 20, 2026
China imposes tariffs on EU dairy imports, escalating trade tensions over EU's electric vehicle tariffs. The move affects key dairy products and may benefit other exporters like New Zealand.
BEIJING/BRUSSELS, Dec 22 (Reuters) - China will impose provisional duties of up to 42.7% on dairy products imported from the European Union, the latest in a series of measures against EU exports widely seen as retaliation for the bloc's electric vehicle tariffs.
The duties, to be collected from Tuesday, will range from 21.9% to 42.7%, although most companies will pay just under 30%. They target unsweetened milk and cream and fresh and processed cheeses, including the iconic French Roquefort and Camembert.
China's Ministry of Commerce said it had found evidence that EU dairy imports were subsidised and hurting Chinese producers.
'UNJUSTIFIED AND UNWARRANTED' MEASURES
The European Commission, which oversees EU trade policy, said the investigation was based on "questionable allegations and insufficient evidence" and called the measures "unjustified and unwarranted".
It already lodged a complaint at the World Trade Organization more than a year ago.
"Right now, the Commission is examining the preliminary determination and will provide comments to the Chinese authorities," a spokesperson said, noting that the investigation was set to conclude by Feb 21.
DAIRY A 'POLITICAL PAWN' IN EV DISPUTE
Monday's decision is provisional and could be revised when a final ruling is made. China significantly lowered provisional tariffs on pork in its final decision last week.
Trade tensions with the EU erupted in 2023 when the European Commission launched an anti-subsidy investigation into Chinese-made electric vehicles. It imposed tariffs in October 2024.
In apparent retaliation, Beijing has imposed measures on imports of EU brandy, pork and now dairy.
Conor Mulvihill, director of Dairy Industry Ireland, said it was frustrating that dairy seemed to be used as a "political pawn" in the wider EU-China EV dispute.
China's Ministry of Commerce said negotiations over the bloc's EV tariffs resumed this month. A senior European diplomat in Beijing said last week that major issues remained between the two sides.
The Commission said it continued to engage with China on the possibility of replacing EV tariffs with minimum price commitments, although these price undertakings had to eliminate the harm from unfair subsidies and be practicable.
EU'S LOSS, NEW ZEALAND'S GAIN?
China imported $589 million of dairy products covered by the current investigation in 2024, similar to 2023 values.
Tom Booijink, Senior Dairy Specialist Europe & Africa at Rabobank, said a 42% tariff would make exports prohibitively expensive, adding that for cheese it was easy to switch to another source.
"So I think New Zealand will be quite happy with this," he said, adding that French producers would suffer the most.
The products listed in the Chinese investigation do not include infant formula, a high-margin business for European exporters.
Roughly 60 companies, including Arla Foods, owner of brands like Lurpak and Castello, will pay tariffs between 28.6% to 29.7%.
Italy's Sterilgarda Alimenti SpA will pay the lowest rate of 21.9%.
FrieslandCampina, facing the highest rate of 42.7%, said it was committed to "constructive dialogue" with China's Ministry of Commerce as the investigation continued.
Henrik Damholt Jorgensen, CEO of the Danish Dairy Board which represents Arla, expressed hope that the matter could be resolved without tariffs.
The decision is likely to be welcomed by Chinese producers who are grappling with a glut of milk and falling prices as declining birth rates and more cost-conscious consumers weigh on demand.
Shares in MengNiu Dairy Co briefly jumped after the announcement, although they ended trading on Monday barely changed.
Rabobank's Booijink said China has seen declining milk prices for the past three years, unlike the rest of the world, and there was likely to be considerable pressure to put in place measures.
China, the world's third-largest milk producer, urged producers last year to rein in output and cull older and less productive cows.
($1 = 0.8521 euros)
(Reporting by Yukun Zhang, Shi Bu, Ryan Woo, Daphne Zhang in Beijing, Charlotte Van Campenhout in Amsterdam, Soren Sirich Jeppesen in Copenhagen, Gus Trompiz in Paris; Additional reporting by Padraic Halpin in Dublin; Editing by Michael Perry, Neil Fullick and Emelia Sithole-Matarise)
The European Commission is the executive branch of the European Union responsible for proposing legislation, implementing decisions, and managing the day-to-day operations of the EU.
Dairy products are food items produced from the milk of mammals, including milk, cheese, yogurt, and butter, commonly consumed worldwide.
A trade conflict occurs when countries impose tariffs or other trade barriers against each other, leading to disputes and tensions in international trade relations.
Explore more articles in the Finance category
