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EU dairy, pork firms fear China's tariffs, e-car tax may cause counter-subsidy

TraderKnows
TraderKnows
06-13

Recently, the EU has repeatedly hinted that it will impose additional tariffs on Chinese electric vehicles. In response, Chinese media have reported that China may retaliate by targeting EU dairy products and meat.

Global food companies, from dairy producers to pork exporters, are on high alert for potential retaliatory tariffs from China. This follows the European Union's decision on Wednesday to impose anti-subsidy duties on electric vehicles made in China.

Chinese state media reports that domestic enterprises are gearing up to request anti-subsidy or anti-dumping investigations on some EU dairy and pork imports, which could lead to prolonged trade disruptions.

Kimberly Cruesser, executive director of the New Zealand Dairy Association, stated, "Increasing trade barriers could lead to a global market realignment." New Zealand is the world’s largest dairy exporter and a production base for foreign companies including the French dairy producer Danone.

Cruesser added, "We always hope for stable and certain trade conditions; markets do not like uncertainty."

According to Chinese customs data, the EU is China's second-largest source of dairy imports, accounting for at least 36% of total imports in 2023, second only to New Zealand. Australia ranks as the third-largest exporter.

While it remains unclear which products China might target for retaliation, EU Agricultural and Rural Development Directorate-General cited Eurostat data showing that last year, among the €1.7 billion ($1.8 billion) worth of dairy products exported to China from the EU, whey powder, cream, and fresh milk were the major export items.

Countries including the Netherlands, France, Germany, Ireland, and Denmark have the highest exposure to the dairy sector in the Chinese market.

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Tariff

Tariffs are a type of tax that governments levy on imported and exported goods, typically appearing as a percentage of the value of the goods.

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