Tariff Differentiation Strategy Rewards Cooperative European Dairy Companies

Chinese authorities have announced provisional tariffs of up to 42.7% on certain European Union dairy imports following an anti-subsidy investigation. The measures, effective Tuesday, create significant differentiation based on company cooperation, with rates ranging from 21.9% to 42.7%.
The European Commission has rejected the tariffs as illegitimate and poorly substantiated. Officials maintain that the investigation is based on questionable allegations without sufficient supporting evidence. Brussels is examining the decision and preparing formal comments.
Trade friction escalated in 2023 when Europe began investigating subsidies for Chinese electric vehicle manufacturers. China has responded with tariffs on multiple European products. The differentiated approach suggests China may reward cooperation even during trade disputes.
About 60 companies will face varying tariff rates based on investigation participation. Italy’s Sterilgarda Alimenti SpA will pay the lowest rate of 21.9%, while Arla Foods, owner of brands such as Lurpak and Castello, will pay tariffs between 28.6% and 29.7%. FrieslandCampina Belgium NV and FrieslandCampina Nederland BV will pay the highest rate of 42.7%. Companies that did not participate in the investigation will pay the highest rate automatically.
Chinese dairy producers stand to benefit as they grapple with oversupply and declining prices. Declining birthrates and more cost-conscious consumers have weakened demand. Last year, China imported $589 million in affected dairy products. Authorities have encouraged domestic producers to curtail production and reduce livestock numbers to stabilize prices.