China Escalates Trade Tensions with EU Over Dairy Products After Revised EV Tariffs

China has initiated an anti-subsidy probe into European Union dairy imports, escalating trade tensions following the EU's adjusted tariff plan on Chinese electric vehicles. The investigation, sparked by a domestic complaint, covers various dairy items from multiple EU countries. Ireland is the largest dairy exporter to China among these countries.

China escalated trade tensions with the European Union on Wednesday by launching an anti-subsidy investigation into imported dairy products from the bloc. This move comes just a day after the EU revised its tariff plan for Chinese-made electric vehicles, reducing the proposed punitive duties slightly but not eliminating them as Beijing had requested.

The Chinese commerce ministry expressed strong disapproval of the EU's findings and vowed to take necessary measures to protect its businesses. Initiated by a complaint from domestic industry associations, the probe will examine subsidy schemes for various dairy products such as cheeses, milks, and creams from eight EU countries, including Austria, Belgium, and Ireland, which is the largest dairy exporter to China.

According to Chinese customs data, the EU was the second-largest source of China's dairy imports in 2023, following New Zealand. EU exports amounted to €1.7 billion last year. This development follows China's earlier anti-dumping probe into EU pork imports, indicating a tit-for-tat strategy in response to the EV tariffs.

(With inputs from agencies.)