China Launches Anti-Subsidy Investigation into EU Dairy Imports

BEIJING/LONDON (Reuters) – China initiated an anti-subsidy investigation into dairy imports from the European Union following the bloc’s adjustment of tariffs on China-produced electric vehicles.

The inquiry, focusing on cheese, milk, and cream intended for human consumption, coincided with the EU modifying its proposed punitive duties on Chinese EV imports from 37.6% to 36.3%. China had requested Brussels to retract these tariffs.

European Union Chamber of Commerce in China

The European Union Chamber of Commerce in China expressed disappointment regarding the escalating trade defense measures between governments. They noted that China’s decision to pursue the anti-subsidy probe should not be unexpected, especially after the European Commission revealed its final findings concerning EVs from China. The chamber intends to closely observe the investigation, hoping for fairness and transparency and encouraging affected member companies to cooperate fully.

FrieslandCampina

FrieslandCampina, a Dutch dairy cooperative, acknowledged awareness of the Ministry of Commerce’s anti-subsidy investigation. A spokesperson indicated they would comply with any requests for information linked to the investigation as required by laws and regulations. The cooperative’s specialized nutrition sector focuses on infant nutrition products in China, alongside selling condensed milk and creamers.

The Irish Farmers Association

Tadhg Buckley, Director of Policy and Chief Economist for the Irish Farmers’ Association, indicated that Chinese authorities are concentrating on “cheese, cream, and related processed cheeses,” estimated to encompass roughly 45 million euros of the 430 million euros (~$478.55 million) in Irish exports last year. He emphasized that if the investigation expands to include powders, the economic impact would be substantially larger. A trade delegation is scheduled to visit China at the end of the month.

Irish Ministry for Agriculture, Food and the Marine

Charlie McConalogue, Ireland’s Minister of Agriculture, Food and the Marine, affirmed his intention to engage with the EU Commission to ensure they have all relevant data concerning Ireland to address the investigation’s concerns, asserting full compliance of European and Irish dairy exports with World Trade Organization regulations.

Jacob Gunter, Lead Economy Analyst at Mercator Institute for China Studies

Gunter assessed that total EU dairy exports to China amount to about 1.7 billion euros, accounting for less than 1% of overall EU exports to China. Even steep tariffs may not heavily impact overall EU exports; however, major exporters like Ireland, Finland, Spain, and Italy may feel significant repercussions. Despite China’s beefing up of local dairy production, it remains a crucial market for certain exports such as butter and cheese, though alternatives from countries like the US, Canada, Australia, and New Zealand might prove more competitive.