San Francisco Frontiers - EU slams China dairy duties as 'unjustified'

China's salvo on Monday is the latest in a trade spat with the EU that spans from food to electric vehicles.

The "duty deposits", which range from 21.9 percent to 42.7 percent, come into effect on Tuesday.

They hit a range of items including fresh and processed cheese, curd, blue cheese and some milk and cream, the commerce ministry in Beijing said in a statement.

Officials launched an anti-subsidy probe in August 2024 after receiving a request from the Dairy Association of China. The probe will conclude in February.

China's commerce ministry said Monday that preliminary findings showed a link between EU subsidies and "substantial damage" to its domestic dairy industry.

European officials contested such conclusions.

"Our assessment is that the investigation is based on questionable allegations and insufficient evidence, and that the measures are therefore unjustified and unwarranted," a European Commission trade spokesman said.

"Right now, the Commission is examining the preliminary determination and will provide comments to the Chinese authorities," he added.

The fees on EU dairy come a week after Beijing said it would impose anti-dumping levies on EU pork imports for five years.

Those duties kicked in on December 17 and range from 4.9 percent to 19.8 percent -- down from temporary levies of 15.6 to 62.4 percent that had been in place since September.

The two economic powerhouses have been locked in a trade spat fuelled by what many European countries view as an unbalanced economic relationship with China.

- Escalating spat -

The current trade spat erupted in 2024 when the EU began moving towards imposing hefty tariffs on Chinese electric vehicles, arguing that Beijing's subsidies were unfairly undercutting European competitors.

Beijing denied that claim and announced what were widely seen as retaliatory probes into imported European pork, brandy and dairy products.

After the EU went ahead with the tariffs on Chinese electric vehicles, Beijing forced EU brandy manufacturers to raise prices or face anti-dumping taxes of up to 34.9 percent.

The EU ran a trade deficit of more than $350 billion with China in 2024.

French President Emmanuel Macron said this month that Europe would consider adopting strong measures against China, including tariffs, if the trade imbalance was not addressed.

Alongside trade frictions, China and the EU are at odds on issues such as Russia's 2022 invasion of Ukraine.

The EU has urged China to exert pressure on Moscow to end the war, but Beijing has shown no sign of acceding.

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G.Miller--SFF