China targets EU cheese and milk in anti-subsidy investigation
China has initiated an anti-subsidy probe into dairy products imported from the European Union, once again placing the bloc’s agri-food sector at the forefront of trade tensions between Beijing and Brussels.
The Chinese Ministry of Commerce announced on 21 August that it will investigate a range of EU dairy imports, including various types of cheese, milk, and cream. In 2023, dairy exports to China reached €1.76 billion, representing over 12% of the EU’s total value in agri-food exports.
The Chinese investigation was launched just a day after the European Commission announced the conclusion of its investigation on China-made electric vehicles, proposing softer-than-expected measures.
EU lowers tariffs on China-made EVs, signals softening trade stance
The European Commission lowered its proposed tariffs on China-made electric vehicles (EVs) on Tuesday (20 August) and offered one of the clearest signals yet that it was open to resolving the long-running trade dispute through negotiations, in a move that could ease flaring trade tensions between Brussels and Beijing.
The investigation, which will run for one year, was prompted by a request from China’s dairy industry on 29 July. Industry associations allege that subsidies provided under the EU’s Common Agricultural Policy (CAP) and by individual member states are potentially damaging to Chinese producers.
Chinese authorities will target all types of EU cheese—including fresh, blue, and processed— and cream and milk with over 10% fat content, not concentrated or sweetened.
China is the eighth-largest market for EU cheese exports, according to Eurostat.
In the first quarter of 2024, the leading EU cheese exporters to China were Italy (3,768 tonnes), Denmark (2,627 tonnes), the Netherlands (2,166 tonnes), and France (2,041 tonnes).
“In perspective, China is a crucial market for us, as our export is growing by double digits,” the president of the Italian industry association Assolatte Paolo Zanetti told Euractiv. Zanetti added that EU agricultural and food products are targeted, “every time there is a trade dispute,” even when “it has nothing to do with them.”
Potential duties on EU milk and cream exports could, however, significantly impact the sector, as these exports were valued at €238.57 million and €323.47 million respectively in 2023, compared to €189.87 million for cheese.
Alexander Anton, the secretary general of the European Dairy Association (EDA), told Euractiv that the organisation is confident, that as in previous cases, the EU and Chinese authorities will find a way to resolve the spat, “with a constructive spirit.”
A Commission spokesperson noted that the EU executive is aware of China’s decision, and will closely monitor the investigation, ensuring it adheres to World Trade Organization (WTO) rules.
The spokesperson added that the Commission will “firmly defend the interests of the EU dairy industry and the Common Agricultural Policy.”
EU pork exports to China are also being investigated by Beijing authorities since last June, a week after the EU announced tariffs on electric cars produced in the Asian country.
Investigation into spirits
China started retaliation moves in response to the EU probe on electric cars last January, when it opened an anti-dumping investigation into alcohol spirit drinks, with Beijing producers accusing European exporters of charging artificially low prices.
On 18 July, at their request, the European spirits trade associations were received by the Chinese Ministry of Commerce (MOFCOM), to provide an update on this investigation.
“This hearing enabled the various European parties to reject the unfounded allegations of dumping, which were neither technically nor legally supported,” the associations said in a press release.
Producers of French brandy, which supplies almost the entire Chinese market, is particularly concerned, especially as it is shrinking (-15% in value between 2022 and 2023).
The results of the probe are expected in January 2025.
EU ‘not worried’ as China probes bloc’s pork imports
The European Commission said it was “not worried” by Beijing’s announcement on Monday (17 June) of an anti-dumping investigation into the bloc’s pork exports, in an escalation of trade tensions with the bloc.
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