China has confirmed that it will impose a tariff of 11.7% on certain EU dairy products for the next five years.

The Chinese Ministry of Commerce (MOFCOM) had initially set the tariff level at 42.7%.

Following engagement with the European Commission, the three sampled companies, and the European Dairy Association (EDA), the Chinese authorities decided to reduce the tariff to 11.7%.

The tariffs follow on from an investigation into what Chinese authorities called EU dairy 'subsidies' under the Common Agricultural Policy (CAP).

China claimed that EU exports of cream and cheese products into China were undercutting its own dairy products.

That investigation was part of wider trade tensions between the EU and China linked to electric vehicles.

China

In a statement, the EDA said this significant reduction in the tariff on certain EU dairy products reflects the strength and substance of the arguments presented to China.

However, the association said it regrets that "the further technical assessment and calculation-based arguments shared in recent weeks were not taken into account in the final determination".

The general additional tariff of 11.7%, as well as the individual company-specific tariffs ranging between 7.4% and 11.7%, remain unchanged.

These measures will enter into force today (Friday, February 13) and will remain in place for a period of five years.

Tariff

The EDA said the "countervailing duties" are applied on top of the existing "normal" import tariffs, which are about 8% on cream and 15% on cheese.

The EU currently exports approximately 30,000t of cheese and 100,000t of cream annually to China.

"These exports already operate in a highly competitive market environment, particularly as other exporting countries benefit from Free Trade Agreements (FTAs) with China.

"This development once again underlines the importance of the European Commission’s efforts to conclude comprehensive Free Trade Agreements that ensure stable and predictable trade relationships for European exporters," the EDA said.

Dairy Industry Ireland (DII) previously warned that the newly revised tariffs on EU dairy exports to China will make EU and Irish products uncompetitive in the Chinese market.

DII said it is disappointed with the confirmation of revised tariffs, and the fact that the Chinese announcement does not reduce tariffs to previous levels.