What's happened
China has announced provisional tariffs ranging from 21.9% to 42.7% on EU dairy products, citing EU subsidies that harm Chinese producers. The move follows a series of retaliatory tariffs related to EU and Chinese disputes over electric vehicle subsidies and other imports, escalating trade tensions between Beijing and Brussels.
What's behind the headline?
The recent tariffs reflect a deepening trade conflict driven by reciprocal measures between China and the EU. The EU’s investigation into Chinese subsidies on electric vehicles prompted China to scrutinize EU farm subsidies, leading to provisional tariffs on dairy products. These tariffs are likely to escalate tensions, potentially prompting further retaliations. The move underscores how trade disputes are increasingly intertwined with broader geopolitical issues, including market access and subsidy practices. For consumers and businesses, this signals ongoing volatility in trade relations, which could impact global supply chains and prices. The tariffs will likely remain in place for several years, shaping the future of EU-China trade relations and possibly prompting reforms in subsidy policies on both sides.
What the papers say
The Guardian reports that China’s tariffs target products like milk, cheese, and protected origin brands, with the European Commission criticizing the move as 'unjustified and unwarranted.' AP News highlights that these tariffs are based on preliminary findings of EU subsidies damaging Chinese dairy, with China also imposing tariffs on pork and brandy as part of ongoing tit-for-tat measures. Both sources emphasize that these actions are part of a broader escalation in trade tensions following EU and Chinese disputes over electric vehicle subsidies and other imports. The Guardian notes that China imported around $589 million worth of dairy from the EU last year, similar to 2023, and sees the tariffs as a response to EU subsidies under the Common Agricultural Policy. AP News adds that China’s investigation into EU dairy subsidies was launched amid a significant trade deficit with the EU, and that previous retaliations included tariffs on pork and cognac, with exemptions granted to some major brands.
How we got here
The tariffs are a response to an investigation launched by China’s Commerce Ministry in August 2024 into EU subsidies for dairy and other farm products. This investigation was part of broader tit-for-tat measures after the EU imposed tariffs on Chinese electric vehicles in 2023. China’s probe found that EU subsidies under the Common Agricultural Policy and national supports from countries like Italy, Ireland, and Finland damaged Chinese dairy producers. The trade dispute is also influenced by China’s significant trade deficit with the EU, which last year exceeded 300 billion euros. Previous retaliations included tariffs on EU pork and brandy, with China accusing the EU of dumping products at unfair prices.
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China, officially the People's Republic of China, is a country in East Asia. It is the world's most populous country, with a population of around 1.4 billion in 2019.
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The European Union is a political and economic union of 27 member states that are located primarily in Europe. Its members have a combined area of 4,233,255.3 km² and an estimated total population of about 447 million.