Lower-than-feared rates ease pressure on exports – including for dairy suppliers.

China has toned down its announced tariffs on dairy products from the EU. Whereas temporary duties of up to 42.7 per cent had previously been indicated, Chinese authorities are now pointing to a general rate of 11.7 per cent, with lower rates for a number of companies.

Probe into EU support in the background
The adjustment follows China’s completion of its investigation into European agricultural support for the dairy sector. Launched in August 2024, the probe aimed to determine whether EU support schemes distort competition to the detriment of Chinese producers. Many observers have viewed the investigation as retaliation for the EU’s introduction of tariffs on Chinese electric vehicles.

According to industry bodies the European Dairy Association and Eucolait, speaking to Reuters, the majority of affected dairy companies will face a tariff of 11.7 percent. At the same time, China is proposing lower rates of 9.5 percent for more than 50 companies.

Major dairy groups to receive lower rate
Among the companies set to receive the lower tariff, according to Euractiv, are Denmark’s Arla, France’s Lactalis and Italy’s Zanetti.

Although the tariffs will still weaken the competitive position of European dairies on the Chinese market, the final rate is considered significantly lower than feared. According to analyst Haider Anjum of Jyske Bank, many market participants had priced in substantially higher duties:

– Higher tariffs are never positive, of course, but the market had expected much harsher rates. Seen in that light, 9.5–11.7 per cent is markedly more accommodating than the levels many feared, he tells Mejerimedier.

Impact extends up the value chain
The assessment applies not only to the dairies themselves, but also to their suppliers. Several of the dairy groups now subject to the lower tariff rate are among the largest customers of fx ingredient and technology suppliers, and the development is therefore also expected to mitigate knock-on effects further up the value chain.

However, the agricultural organisation Copa-Cogeca continues to express concern that dairy products are being drawn into broader trade policy disputes. The organisation is calling for a diplomatic solution that does not further worsen the situation for producers already under pressure from market conditions.

The exact tariff applied to individual dairy products may vary, according to the tariff list published by the Chinese authorities.

By Maja Løvstrup
Photo: Colourbox