China’s Anti-Subsidy Probe on EU Dairy

China’s Ministry of Commerce announced on August 21, that it has launched an anti-subsidy investigation into dairy products imported from the European Union.

The investigation, which is expected to be completed within 12 months but could be extended for another six months, aims to assess whether the 20 different forms of subsidies granted by the European Union and its member states to the dairy sector comply with World Trade Organization rules. The products targeted by the investigation include fresh and processed cheeses, blue cheeses, and milk and cream with a fat content of more than 10 percent.

These subsidies include funding for the purchase of farm machinery, income supplements for young farmers, and environmental and administrative incentives.

This investigation follows the confirmation of EU-imposed tariffs on Chinese electric vehicles and could lead to increased tariffs on dairy exports to China.

The European Commission expressed confidence that European subsidies comply with international regulations and declared its commitment to defend the agricultural sector.

Based on Eurostat data, the European Union exported dairy products worth EUR 1.7 billion to China in 2023, accounting for 9.5 per cent of the EU's total dairy exports.

In the first four months of 2024, according to ISTAT data, Italian dairy exports to China reached EUR 30.5 million, an increase of 20.5 per cent over the previous year, while in the same period, total Italian agri-food exports were EUR 194 million, an increase of 26 per cent over the previous year.