China is set to revise new tariffs on some EU dairy produce, reducing the level of tariffs announced before Christmas.

However, the reduced tariffs are on top of tariffs that were already in place before the pre-Christmas announcement, leading to concerns that the latest tariffs will make EU products uncompetitive in the Chinese market.

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 the these subsidised products into China were undercutting its own dairy products.

However, it is generally understood that this anti-subsidy investigation is part of a wider trade dispute that started over electric vehicles, but which has now taken in not only EU dairy but also pork products.

Before Christmas, the Chinese Ministry of Commerce said that it had issued a preliminary ruling that the "subsidy rate" for cream and cheese from EU dairy companies was between 21.9% and 42.7%, and that it had decided to implement what it called provisional anti-subsidy measures.

Agriland understands that the European Commission Civil Dialogue Group on Milk, which is an EU forum for representatives of the dairy sector, was informed by the European Commission in recent days that it had, in turn, been informed by authorities in China of a final rate of additional tariffs.

A list of impacted EU companies, seen by Agriland, appears to outline over 60 EU dairy companies that will face an additional tariff rate of between 7.4% and 11.2%, with most of these businesses attracting a tariff rate on their products of 9.5%.

This includes a company referred to in the list as "Kerry Ingredients & The Flavours Limited".

That document also states that other EU companies (i.e. not those included in this list of lower tariffs but included in the scope of the new tariffs) will attract a tariff rate of 11.7%.

The European Commission has said that, while the new tariffs are not set to be finalised until February 21, it has "since the beginning of this case...expressed its serious concerns, considering it to be based on questionable allegations and insufficient evidence, rendering the proposed measures unjustified".

A commission spokesperson said that a comment on the final determination of tariffs will be submitted to the Chinese authorities, and that the commission is assessing all available information to ensure full compliance with the rules of the World Trade Organisation (WTO).

The commission had already commenced proceedings with the WTO against China's anti-subsidy investigation.

"The commission is taking all necessary steps to defend EU farmers, exporters, and the Common Agricultural Policy against what it considers an unjustified use of trade defence instruments by China," the commission spokesperson said.

However, sources suggest that the the Civil Dialogue Group on Milk was informed that the newly announced tariffs will be for five years and a case taken with the WTO could take three years.