What Happened
China’s Ministry of Commerce announced that, starting December 23, 2025, it will impose temporary countervailing duties — collected as security deposits at customs — on certain dairy products imported from the European Union. The duties range from 21.9% to 42.7% depending on the company and cooperation in the investigation.
The measures follow a formal anti-subsidy investigation launched on August 21, 2024 into EU dairy imports, with preliminary findings indicating that subsidies granted under the EU’s Common Agricultural Policy had harmed China’s domestic dairy industry.
What Products Are Covered
The provisional duties apply to dairy products such as:
- Fresh and processed cheeses (including blue cheeses)
- Milk and cream with high fat content
- Other dairy items where subsidized imports were found to cause material injury to China’s producers
Different companies face different duty levels: cooperating firms may be assigned lower rates, while non-cooperative ones face the highest rate of 42.7%.
Context and Background
This move is part of an ongoing trade dispute between China and the EU. Tensions escalated after the European Commission adopted tariffs on Chinese electric vehicles, arguing that subsidies distorted competition. China’s countermeasure targeting dairy products is widely seen as a tit-for-tat response, although Beijing insists it is based on trade-remedy laws.
The European Commission has criticized China’s action as “unjustified and unwarranted,” questioning the sufficiency of the evidence behind the investigation.
Impact on Trade
- EU dairy exporters — especially companies that did not cooperate with the probe — now face significant additional costs when exporting to China.
- Chinese dairy producers may gain short-term protection and pricing relief.
- Supply chain costs for cheese, cream, and milk exports to China will rise sharply as provisional duties are collected at Chinese ports.
What Comes Next
These are temporary measures pending final determination of the anti-subsidy investigation. If the final ruling confirms subsidies and material injury, the provisional duties could be formalized into long-term countervailing duties under WTO rules.