China's recent decision to impose provisional countervailing duties on European Union (EU) dairy products has intensified the ongoing trade dispute between the two economic giants. The tariffs, which range from 21.9% to 42.7%, are China's response to what it perceives as EU subsidies harming its domestic dairy industry. This move has been met with strong objections from the EU, which calls the measure unfair and unsubstantiated.
The Chinese Ministry of Commerce (MOFCOM) announced the decision on December 22, stating that the duties would take effect from December 23. The ministry argued that the EU's subsidies have caused substantial damage to China's dairy sector and justified the tariffs as a necessary countermeasure.
This action follows China's imposition of anti-dumping duties on EU pork and is seen as part of a broader strategy to retaliate against the EU's high tariffs on Chinese goods, including electric vehicles. The EU, in response, has expressed regret and criticized the investigation's basis, stating it lacks sufficient evidence.
The French Dairy Association, which represents major firms like Danone and Lactalis, described the tariffs as "shocking and damaging," highlighting potential adverse effects on French exports, particularly those of cheese to China.
The escalating trade tensions come as China has not initiated any new trade remedy investigations against the EU in 2025 but has finalized rulings on existing cases. In contrast, the EU has been active, launching numerous investigations and imposing tariffs on Chinese products.
China's MOFCOM expressed its hope to resolve trade disputes through dialogue, underscoring the importance of maintaining stable economic relations between China and the EU. However, the imposition of these tariffs suggests that the road to resolving these tensions may be fraught with challenges.
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