China has imposed temporary tariffs on some EU dairy imports as it seeks to prop up its domestic market.
Effective since December 23, 2025, the measures form part of an ongoing anti-subsidy probe carried out by China’s ministry of commerce.
Two large product categories, cheese and high-fat milk and cream with fat of more than 10%, are being targeted, but other commodities including milk powders to butterfat remain outside the case’s scope.
Companies from Lactalis to FrieslandCampina are facing duties in the range of 21.9% to 42.7%.
The proposed tariffs could cost the EU dairy industry in the region of €120m to €280m per year in additional duties, we estimate.
Why is China investigating EU dairy?
The probe was launched in 2024 after the Dairy Association of China called on MOFCOM to introduce countervailing measures (e.g. additional tariffs) to offset the perceived price advantages EU dairy imports enjoyed over domestic products.
The case covered the period between 2020 and the first quarter of 2024 and focused on EU cheese and high-fat milk and cream imports.
From Bel to FrieslandCampina, some of the bloc’s biggest cheese and cream producers were asked to disclose subsidy payment evidence, export volumes, product mix and other EU-level benefits. Meanwhile, three major domestic producers – Mengniu, Yili and Shanghai Milkground – submitted evidence of ‘injury’.
MOFCOM’s investigation calculated preliminary ad valorem subsidy rates as high as 42.7% for some EU exporters and concluded that imports had caused ‘material injury’ to China’s domestic dairy industry.
To make amends, the authorities have proposed to tax EU companies rates of between 21.9% to 42.7%.
How are EU exports hurting China’s dairy industry?
MOFCOM claims that subsidised imports negatively impacted cream and cheese prices in China by causing price suppression in cream and price depression in cheese.
The ministry estimates that subsidized cream and cheese imports accounted for between 24% and 35% of China’s total imports of such products in the period – and the EU had been ‘a major source’.
The authorities also blame the domestic market’s sluggishness on unfair competition from EU imports. According to MOFCOM, domestic sales fell in the period while inventories surged; the sector recorded widening losses from 2022 onwards, and capacity utilization remained low and declined by the end of 2024’s first quarter.
Which products are affected?
Two broad products categories are affected by China’s anti-subsidy probe: cheese and high-fat milk and cream of over 10% fat.
Cheese products that fall in scope include fresh, processed, blue, specialty cheeses, mozzarella, cheddar, brie-style, mascarpone-type products.
High-fat milk and cream that are in scope include such products that have milk and cream exceeding 10% fat by weight; are not concentrated, and are unsweetened.
Dairy products included in China's probe and their HS codes
Cheese
Fresh cheese (including whey cheese) and curd
Processed cheese (whether or not grated/powdered)
Blue‑veined cheese and other veined cheeses (Penicillium roqueforti)
Other cheeses not elsewhere specified
HS codes (cheese):
04061000, 04062000, 04063000, 04064000, 04069000
High‑fat milk/cream with fat content >10%
04015000 (milk & cream exceeding 10% fat by weight, not concentrated/unsweetened)
Which products are excluded?
Anything that isn’t classified under the codes above doesn’t fall under the scope of the anti-subsidy probe.
Butter, yogurt, infant formula and other products are thus excluded.
- Milk and cream with fat of 10% or less
This can include concentrated milk or cream, sweetened milk and standard drinking milk.
- Butter and milkfat products
This may include AMF, ghee, butter oil and dairy spreads that fall outside the in-scope product codes.
- Milk powders, whey powders and protein concentrates
MOFCOM’s scope is limited to the listed HS codes (04015000 and 0406), leaving out powders and in-demand protein concentrates as well as skimmed and whole milk powder (often HS 0402); whey and whey powder; WPC or WPI (often HS 0404); and casein/caseinates (often HS 3501).
- Yogurt and fermented milk drinks (buttermilk, kefir)
Yogurt and fermented products (often classified under HS codes 0403) are also out.
- Ice cream and edible ice
Classified under HS 2105, EU ice cream exports have so far been left out of the anti-subsidy measures.
- Infant formula and specialised nutrition
Most infant formula falls outside of the investigation’s scope, too.
How much ‘subsidized’ product was imported from the EU to China?
EU exports of cheese and high-fat milk and cream fell from 2020 to 2023 but increased in Q1 2024 year on year by over 11%, according to China’s estimates.
More cream than cheese was imported in the period, according to MOFCOM’s investigation.
The ministry estimates the following volumes were imported into China:
- 2020: 76,600 tonnes of cream / 26,400 tonnes of cheese (103,000 tonnes in total for the year).
- 2021: 116,000 tonnes of cream / 39,400 tonnes of cheese (155,400 tonnes in total).
- 2022: 99,200 tonnes of cream / 29,000 tonnes of cheese (128,200 tonnes total).
- 2023: 97,000 tonnes of cream / 32,600 tonnes of cheese (129,500 tonnes in total).
- Q1 2024 (January to March alone): 18,400 tonnes of cream / 6,700 tonnes of cheese (25,100 tonnes in total).
How were the tariff rates calculated?
The amount exporter groups would pay was calculated by MOFCOM using the company’s raw milk purchase price and a ‘fair market’ milk price – which the Chinese decided would be the average raw milk prices of Switzerland and Norway because the EU raw milk prices were ‘seriously distorted’.
The ministry then produced an ad valorem rate by dividing the cost, insurance and freight export price to China.
What rates are EU exporters facing?
China investigated in the greatest depth three exporter groups and their affiliates – France’s Elvir; FrieslandCampina Nederland B.V. and FrieslandCampina Belgium N.V.; and Sterilgarda Alimenti S.p.A. – and also received evidence from so-called ‘cooperating companies’ – including Arla Foods, Bel Group and Lactalis.
Below is a table of the EU companies that participated in the Chinese probe – and the tariff rates they face.
All other EU companies not listed here are facing a 42.7% tariff.
How is China collecting the duties?
China is taxing EU exporters through so-called ‘security deposits’ – cash deposits to be collected at the border while the investigation completes in February.
What costs are EU exporters facing?
According to China’s commerce ministry, a total of around 541,200 tonnes of in-scope products were imported at the cost of around €1.87 to €2.29bn from 2020 to the first quarter of 2024.
We estimate that the proposed tariffs could cost the EU dairy industry between €118 to €280 million per year in added border deposits, depending on the exporter’s assigned rate.
This is calculated using 2023 trade data as baseline, being the latest full year in the period. If export flows continue under the provisional measures, that would imply a deposit cost of:
- ~€118 million to 144 million at 21.9%
- ~€160 million to €195 million at 29.7%
- ~€230 million to €281 million at 42.7%.
What’s next?
The investigation’s deadline is February 21, 2026 – meaning that the final tariff rates are yet to be set in stone.
We have approached the European Dairy Association for comment.
