On December 22, 2025, China's Ministry of Commerce (MOFCOM) announced provisional countervailing duties ranging from 21.9% to 42.7% on certain dairy products imported from the European Union, effective from December 23, 2025. The decision follows a preliminary ruling in an anti-subsidy investigation that found EU dairy exports benefited from subsidies, causing substantial damage to China's domestic dairy industry.
MOFCOM stated that preliminary evidence established the existence of subsidies, material injury to Chinese producers, and a causal link between the two. The duties target products such as unsweetened milk and cream with fat content exceeding 10%, fresh cheese, processed cheese, blue-veined cheese (including iconic French Roquefort), and curd. Most cooperating EU companies face rates around 28.6% to 29.7%, while non-cooperating firms, including Dutch giant FrieslandCampina's operations in the Netherlands and Belgium, are subject to the maximum 42.7%. Italy's Sterilgarda Alimenti SpA received the lowest rate of 21.9%.
The investigation, launched on August 21, 2024, at the request of the China Dairy Association and China Dairy Industry Association representing domestic producers, examined imports from April 1, 2023, to March 31, 2024, and assessed industry damage from 2020 to 2024. It scrutinized around 20 subsidy programs under the EU's Common Agricultural Policy (CAP), plus national schemes in member states including Ireland, Austria, Belgium, Italy, Finland, and Croatia.
Originally scheduled to conclude by August 21, 2025, the probe was extended by six months due to its complexity, with a final ruling now expected by February 21, 2026. Provisional measures are standard in such cases and may be adjusted based on the final determination.
China imported approximately $589 million worth of the affected dairy products from the EU in 2024, similar to 2023 levels. Key exporters include France (a major supplier of cheeses like Roquefort and Camembert), the Netherlands, Italy, and Germany.
The European Commission swiftly criticized the move, calling the investigation "based on questionable allegations and insufficient evidence" and the measures "unjustified and unwarranted." A spokesperson stated that the Commission is reviewing the preliminary ruling and will submit formal comments to Chinese authorities.
This development escalates ongoing trade frictions between China and the EU, widely viewed as retaliatory amid disputes over electric vehicles (EVs). The EU imposed definitive countervailing duties of up to 45.3% on Chinese-made EVs in October 2024, following a 2023 probe into state subsidies. Beijing has consistently denied retaliatory intent, insisting its investigations comply with World Trade Organization (WTO) rules and stem from domestic industry applications.
Parallel actions include China's earlier probes into EU brandy (resulting in tariffs, later adjusted with exemptions for major producers) and pork. On December 16, 2025, MOFCOM issued a final ruling in the anti-dumping investigation into EU pork and pig by-products, launched in June 2024. It imposed duties of 4.9% to 19.8% for five years starting December 17, 2025—a significant reduction from provisional rates of up to 62.4% imposed in September 2025. Major exporters like Spain, Denmark, and the Netherlands are affected, though the lower rates mitigate some impact on the over $2 billion annual trade.
China's domestic dairy sector has faced challenges including oversupply, declining prices, and weakening demand linked to demographic shifts. Analysts note that while the tariffs protect local producers, they could raise consumer prices and prompt EU exporters to redirect supplies elsewhere.
The dairy decision adds to a series of tit-for-tat measures straining China-EU economic ties, which saw the EU run a trade deficit exceeding €300 billion in recent years. Negotiations on EV tariffs resumed in December 2025, with discussions exploring minimum price commitments as an alternative, though significant hurdles remain.
Experts emphasize that China's probes follow standard WTO procedures, contrasting with criticisms of the EU's EV investigation as unilateral. The outcome of the dairy case's final phase could influence broader talks, as both sides navigate protectionism amid global trade uncertainties.
