China Urges Domestic Dairy Producers to Reduce Older Cow Herds Amid Oversupply

Chinese authorities have implemented provisional tariffs ranging from 21.9% to 42.7% on select European dairy imports effective Tuesday. Most companies will face duties near 30%. The measures follow an anti-subsidy investigation seen as retaliation for EU tariffs on Chinese electric vehicles.
Brussels has condemned the move as unjustified and based on inadequate evidence. The European Commission maintains that the investigation relies on questionable allegations without sufficient proof. Officials are reviewing the decision and preparing formal objections.
The trade dispute began in 2023 when the European Commission initiated an investigation into Chinese electric vehicle subsidies. Beijing has responded with tariffs on European brandy, pork, and now dairy products. However, China has occasionally softened its stance, reducing tariffs in final decisions and exempting certain major companies.
About 60 companies face the new tariffs at varying rates. Arla Foods will pay between 28.6% and 29.7%. Sterilgarda Alimenti secured the lowest rate at 21.9%, while FrieslandCampina’s Belgian and Dutch operations face the maximum 42.7%. Companies that declined participation automatically receive the highest tariff.
The decision is likely to be welcomed by Chinese producers who are grappling with a glut of milk and falling prices. China, the world’s third-largest milk producer, urged producers last year to rein in output and reduce the number of older and less productive cows. Declining birthrates and more cost-conscious consumers have weakened demand. Last year, China imported $589 million in affected dairy products.