China hits EU dairy products with provisional duties

China will impose provisional duties of 21.9% to 42.7% on certain dairy products imported from the European Union starting on December 23, following an anti-subsidy probe that began more than a year ago.

Preliminary evidence shows imported dairy products originating from the EU are subsidised, causing substantial damage to China's domestic industry, the Chinese commerce ministry said in a statement on Monday.

Trade tensions with the EU erupted in 2023 when the European Commission - which oversees the bloc's trade policy - launched an anti-subsidy investigation into Chinese-made electric vehicles.

Beijing later kicked off probes into imports of EU brandy, pork and dairy products, in moves seen as retaliation for Europe's EV decision.

The EU firm that was hit by the lowest rate of 21.9% was Italy's Sterilgarda Alimenti SpA, while FrieslandCampina Belgium N.V. and FrieslandCampina Nederland B.V. will pay the highest rate of 42.7%, according to the Chinese commerce ministry.

All other EU firms that did not participate in China's anti-subsidy investigation would also have to pay the highest rate.

A dozen French companies will pay 29.7%, while around 50 others from countries including Italy, France and Germany will be hit by 28.6%, the commerce ministry statement showed.

The European Union was China's second-biggest source of dairy products, behind only New Zealand, Chinese customs data shows.

In particular, China was the second-largest destination for skimmed milk powder and the fourth for both butter and whole milk powder, according to 2023 EU data.

China has exercised prudence and restraint in using trade remedy measures, an official at the trade remedy department of the commerce ministry said in a separate statement.

Beijing has not initiated any new trade remedy investigations against the EU this year and has only issued final rulings on three anti-dumping cases involving brandy, copolymerised polyformaldehyde, and pork, it said.

"China’s position against the abuse of trade remedy measures remains unchanged, and we are willing to work with the EU through dialogue and consultation to properly handle trade frictions and jointly safeguard the overall China-EU economic and trade cooperation," the official said.