China extends anti-subsidy probe into EU dairy products

CHINA – China’s Ministry of Commerce has announced that it will extend the ongoing anti-subsidy investigation into certain dairy products imported from the European Union (EU).

The probe, which initially focused on select categories such as cheese and milk powder, now encompasses a broader range of dairy goods, including infant formula and whey protein concentrates.

The Ministry of Commerce in Beijing stated that the extension was necessary to allow for a more comprehensive review of alleged subsidies provided to European dairy producers.

Chinese authorities claim that these subsidies may be distorting market competition and harming domestic dairy industries by enabling EU exporters to sell products at artificially low prices.

The investigation was first launched in response to a complaint filed by Chinese dairy stakeholders, who argue that the influx of subsidized European dairy products has undercut local producers and disrupted pricing structures.

The extension suggests that China is taking a more assertive stance in defending its agricultural sector amid growing concerns over food security and economic self-reliance.

European officials have expressed concern over the move, warning that it could further strain trade relations between China and the EU.

The European Commission has called for transparency and adherence to World Trade Organization (WTO) rules throughout the investigation process.

Industry analysts note that the probe could have significant implications for major EU dairy exporters such as France, Germany, and the Netherlands, which collectively supply a substantial portion of China’s imported dairy products.

EU challenges China’s anti-subsidy probe

In 2024, the European Commission announced its decision to challenge China’s anti-subsidy investigation into EU dairy imports at the World Trade Organisation (WTO). 

“The EU’s action was prompted by an emerging pattern of China initiating trade defense measures, based on questionable allegations and insufficient evidence, within a short period of time,” the commission said.

China’s investigation was announced last month, coinciding with escalating trade tensions between the EU and China. 

The anti-subsidy probe targets liquid milk and cream with a fat content higher than 10%, as well as various types of cheese originating from the EU. 

This investigation stems from an application made by the Dairy Association of China and the China Dairy Industry Association in July, seeking to address concerns over perceived unfair competition.

Valdis Dombrovskis, the European Commission’s executive vice-president and commissioner for trade, criticized the basis of China’s investigation, stating it is founded on “questionable allegations and insufficient evidence.” 

He emphasized the EU’s determination to challenge the investigation through all available channels, urging China to halt the proceedings immediately.

This decision reflects an emerging pattern in which China has launched multiple trade defense measures against EU products.

The request for consultations filed by the EU represents the first step in the WTO dispute settlement process. 

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