China launches anti-subsidy probe into EU dairy products which could hurt Irish exports

The move comes in response to the EU imposing tariffs on Chinese made electric cars. 

China has opened an anti-subsidy probe into imported dairy products from the EU which could have a significant impact on Ireland as one the bloc’s largest exporters of dairy products to the country.

This comes up a day after Brussels published its revised tariff plan for China-made electric vehicles.

The EU on Tuesday revised its proposed punitive duties on imports of Chinese EVs to 36.3% from an initial planned duty of 37.6%, but fell short of abandoning them, as Beijing had called on Brussels to do.

The revision drew rebuke from China's commerce ministry, which in response said it is "firmly opposed to and highly concerned" about the findings, and vowed to take all necessary measures to protect Chinese firms.

The anti-subsidy investigation on dairy announced by China's commerce ministry on Wednesday will focus on various types of cheeses, milks and creams intended for human consumption.

It was prompted by a complaint submitted by the Dairy Association of China and the China Dairy Industry Association on July 29 on behalf of the domestic dairy industry, the ministry said.

China will examine 20 subsidy schemes from across the 27-strong bloc, specifically those from Austria, Belgium, Croatia, Czech Republic, Finland, Italy, Ireland, and Romania, it said in a statement.

Of the countries listed, Ireland is by far the biggest exporter of dairy products to China, having sold €414m worth of goods to the Asian nation last year.

The EU was China's second-largest source of dairy products with at least 36% of the total value of imports in 2023, behind only New Zealand. 

The EU exported €1.7bn in dairy products to China in 2023, down from €2bn in 2022, according to data from the European Commission's Directorate-General for Agriculture and Rural Development, which cited Eurostat.

China already launched an anti-dumping probe into imports of EU pork in June, which mainly affects Spain, the Netherlands and Denmark, in a tit-for-tat move against the EV tariffs.

"The combined value of EU pork and dairy exports to China —areas of goods potentially affected by tariffs — are smaller than the value of China's battery EV exports to the EU, which we estimate to stand at around $13.5 billion in 2023," Chim Lee, senior China analyst at the Economist Intelligence Unit.

"Domestic economic pressures, alongside the increasingly important role played by external demand in supporting China’s economy, will keep Chinese policymakers cautious about invoking an overly confrontational approach to trade," Mr Lee said.

Reuters