China targets dairy in response to electric vehicle tariffs

China’s launch of an investigation into European subsidies for dairy products came a day after the European Commission confirmed new tariffs of up to 38 per cent on Chinese electric vehicles. The European Chamber of Commerce in China said Beijing’s response to the Commission’s action came as no surprise.
“Regrettably, the use of trade defence instruments by one government is increasingly being responded to, seemingly in kind, by the recipient government,” the group said. “The Chamber will be monitoring the ongoing investigation and hopes that it will be conducted fairly and transparently. We expect our affected member companies to co-operate to the fullest with the investigation.”
Triggered by an application from two bodies representing the Chinese dairy industry, the investigation is limited to cheese, milk and cream. It does not include concentrated or sweetened products or, crucially for the Irish dairy industry, baby formula.
Ireland exported 69,060 tonnes of dairy produce with a value of €423.1 million to China in 2023, according to CSO data. And Ireland’s Dairy Equipment Subsidy Scheme is in the sights of the Chinese investigation. The probe will look into seven EU-wide subsidy schemes under the Common Agricultural Policy, including basic income payments and green subsidies.
But it is has also identified a number of national schemes that could offer a competitive advantage to the dairy industry in individual member states. “The Irish Dairy Equipment Subsidy Scheme provides cash subsidies for agricultural producers to purchase production equipment, which can reduce the cost expenditure of agricultural producers,” the China Dairy Association and the China Dairy Industry Association said in their application calling for an anti-subsidy investigation.
“The service support and cash subsidies provided by the Irish Government to agricultural producers are conducive to maintaining the stable production of milk and dairy products, enhancing the risk resistance and market competitiveness of enterprises, and the milk and dairy product sectors can benefit from it.”
The two industry groups acknowledged that they were unable to determine how much the Irish subsidy scheme was worth to the producers of the products under investigation. But they called on the Chinese authorities to make the necessary inquiries in Ireland.