China extends dairy subsidy probe in response to EU tariffs
- The Chinese Commerce Ministry has extended its anti-subsidy investigation into EU dairy products until February 21, 2026.
- The investigation focuses on subsidies provided under the EU's Common Agricultural Policy targeting commodities like cheese and milk.
- This development is seen as a retaliation by China in response to the EU's significant tariffs on Chinese electric vehicles.
In a significant development in international trade relations, the Chinese Ministry of Commerce announced on August 18, 2025, that it would extend its anti-subsidy investigation into dairy products from the European Union until February 21, 2026. This investigation originated from a probe initiated in August 2024, which was triggered by heightened tensions following the European Union's imposition of substantial tariffs on Chinese electric vehicles. The increased tariffs, which soared as high as 45.3 percent, were instituted by the EU under the pretext of mitigating market distortions caused by alleged government subsidies supporting China's electric vehicle industry. This action ignited a series of retaliatory measures from China, primarily centered around the EU's dairy sector, which includes cheese, milk, and cream products. The investigation scrutinizes subsidies provided under the EU's Common Agricultural Policy, as well as national measures implemented by specific member states including Austria, Belgium, Croatia, Finland, Italy, the Netherlands, Denmark, and France. China's decision to prolong the investigation underscores the complexity and significance of this trade dispute, as both sides continue to grapple with accusations of violating international trade rules. The European Commission has maintained that the tariffs placed on Chinese electric vehicles are justified due to what they perceive as excessive state support for manufacturers within China. Conversely, China has consistently refuted these claims, viewing the EU's measures as predominantly protectionist. Despite attempts to foster closer ties, as evidenced by the recent summit commemorating 50 years of diplomatic relations, the unresolved trade tensions, particularly focusing on dairy, brandy, and pork exports, linger as contentious issues in the bilateral relationship. These developments indicate that international trade relations, particularly between major economies like China and the EU, remain fraught with challenges, as both parties must navigate a landscape marked by protectionist policies and retaliatory measures.