Senior European Diplomat Reports Major Issues Remain in China Trade Talks

Chinese authorities have imposed provisional tariffs of up to 42.7% on European Union dairy products following an anti-subsidy investigation. The duties, effective Tuesday, range from 21.9% to 42.7%, with most companies paying around 30%. The measures are widely interpreted as retaliation for EU electric vehicle tariffs.
The European Commission has condemned the tariffs as unjustified and lacking legitimate basis. Officials maintain that the investigation is based on questionable allegations without sufficient supporting evidence. Brussels is examining the decision and preparing formal comments to challenge the findings with Chinese authorities.
These tariffs represent the latest development in a trade confrontation that started in 2023 when Europe began investigating Chinese EV subsidies. China’s ministry of commerce said negotiations over the bloc’s EV tariffs resumed this month, though talks were scheduled to end last week with no announcement since. A senior European diplomat in Beijing said last week that major issues remained between the two sides.
Approximately 60 companies will face the new tariffs at varying rates. Arla Foods will pay 28.6% to 29.7% on brands like Lurpak and Castello. Sterilgarda Alimenti secured the lowest rate at 21.9%, while FrieslandCampina’s Belgian and Dutch operations must pay 42.7%. Non-participating companies automatically receive maximum tariffs.
The protective measures come as Chinese dairy producers deal with excess supply and falling prices. Declining birthrates and increasingly frugal consumers have dampened demand. China imported roughly $589 million in affected dairy products last year. The government previously urged domestic producers to reduce milk production and cull older, less efficient cattle.