China Previously Moderated Pork and Brandy Tariffs Despite Initial Threats

Beijing has announced provisional tariffs ranging from 21.9% to 42.7% on select European dairy imports starting Tuesday. Most companies will face duties near 30%. The decision follows an anti-subsidy investigation widely seen as retaliation for EU tariffs on Chinese electric vehicles.
European officials have strongly rejected the tariffs, calling them unwarranted and lacking proper justification. The Commission’s assessment indicates the investigation is based on questionable allegations and insufficient evidence. Brussels is conducting a detailed examination and preparing formal objections.
Trade friction began in 2023 when the European Commission launched an investigation into Chinese EV subsidies. Beijing has imposed tariffs on EU brandy, pork, and now dairy. However, China significantly lowered provisional tariffs on pork in its final decision last week and partly spared major cognac producers after its brandy investigation, demonstrating occasional willingness to moderate its stance.
The tariff structure affects approximately 60 companies with differentiated rates. Arla Foods will pay between 28.6% and 29.7%. Italy’s Sterilgarda Alimenti faces the lowest rate at 21.9%, while FrieslandCampina’s Belgian and Dutch operations must pay 42.7%. Companies that refused to participate automatically receive maximum penalties.
Chinese dairy producers are likely to welcome these measures as they grapple with oversupply and declining prices. Falling birthrates and budget-conscious consumers have reduced demand. Last year, China imported $589 million in affected dairy products. Authorities have encouraged domestic producers to scale back output and reduce the number of older, less productive cattle to stabilize prices.