China launches probe into EU dairy subsidies

China launched an anti-subsidy investigation into dairy products imported from the European Union on Wednesday, intensifying trade tensions between Beijing and Brussels.

The move, announced on Wednesday by China’s commerce ministry, followed the European Union's decision to revise its proposed tariffs on Chinese electric vehicles (EVs), a change that Beijing had urged the EU to abandon.

On Tuesday, the EU adjusted its punitive duties on Chinese EV imports to 36.3%, down slightly from the initially planned 37.6%.

However, the adjustment failed to satisfy China, prompting a strong response from the Chinese commerce ministry, which expressed firm opposition and vowed to protect its domestic industries.

According to Reuters, the anti-subsidy probe would scrutinise a range of dairy products, including cheeses, milk, and creams, and was triggered by a complaint from the Dairy Association of China and the China Dairy Industry Association.

China’s investigation would apparently focus on 20 subsidy schemes across several EU member states, including Austria, Belgium, Croatia, the Czech Republic, Finland, Italy, Ireland, and Romania.

Ireland, the largest exporter of dairy products to China among the listed countries, sold $461m worth of dairy goods to the Asian market last year.

Overall, the European Union was China’s second-largest source of dairy imports in 2023, contributing 36% of the total value, second only to New Zealand.

The move followed a similar anti-dumping investigation launched by China in June against EU pork imports, primarily affecting Spain, the Netherlands, and Denmark, in what appeared to also be a retaliatory response to the EU's EV tariffs.

Reporting by Josh White for Sharecast.com.