NextFin News - On December 22, 2025, China’s Ministry of Commerce declared it would impose provisional anti-subsidy duties ranging from 21.9% to 42.7% on selected dairy products imported from the European Union, effective December 23. This decision came after an investigation initiated in August 2024, prompted by a complaint from the Dairy Association of China. The probe found that EU subsidies to dairy producers have caused “substantial damage” to China’s domestic dairy industry, establishing a causal link between these subsidies and harm to local producers.
The tariffs apply to various dairy items including fresh and processed cheese (such as blue cheese and curd), as well as certain types of milk and cream. Leading EU exporters such as FrieslandCampina from Belgium and the Netherlands face the highest duties at 42.7%, while Italy’s Sterilgarda Alimenti SpA is subject to lower rates around 21.9%. Companies that did not cooperate or participate in the investigation are also subject to elevated tariffs around 28.6% to 29.7%.
This import duty follows a similar measure imposed on EU pork products on December 17, 2025, where China introduced anti-dumping tariffs between 4.9% and 19.8%, after temporarily applying higher rates up to 62.4% since September. Together these moves symbolize rising trade frictions between China and the EU, touching key agricultural sectors while also linked to a broader dispute encompassing high-tech and electric vehicle sectors.
Against this backdrop, China remains the world’s largest dairy importer with the EU trailing as its second-largest supplier after New Zealand. The increased tariffs are projected to reshape import dynamics, potentially reducing EU dairy’s market share in China and altering competitive balances.
The investigation and resulting tariffs come amidst ongoing tensions between the EU and China related to reciprocal trade barriers, with the EU previously launching an anti-subsidy probe into Chinese electric vehicle exports. China’s retaliatory approach through agricultural sectors reveals a strategic use of trade defense instruments to protect domestic industries and to pressure the EU in negotiations.
Looking forward, the tariffs are provisional and linked to the ongoing probe, scheduled to conclude in February 2026, where rates could be adjusted. The measures may prompt the EU and China to seek negotiated settlements or escalate tariffs further, affecting global dairy supply chains. Dairy exporters will likely explore diversification strategies toward alternative markets, and China may accelerate promotion of local production to reduce import dependence.
In the immediate term, EU dairy exporters will face higher costs and price pressures in the Chinese market, potentially leading to reduced competitiveness, margin compression, and market share erosion. Chinese consumers might see higher prices and limited product variety in premium dairy products, impacting spending patterns. The broader implications reflect a shifting landscape of international trade where economic nationalism and subsidy disputes increasingly influence policy decisions under U.S. President Trump’s administration and ongoing global geopolitical competition.
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