China cuts EU dairy tariffs, easing trade tensions after EV dispute
EU called Beijing’s tariffs ‘unwarranted’, and mulls WTO action, but China cutting some duties signals possible improvement in ties
China on Thursday reduced tariffs on European Union dairy imports worth over US$500 million, in the final ruling of an 18-month anti-dumping investigation started in response to the bloc’s duties on Chinese electric vehicles.
The new tariffs ranging from 7.4 per cent to 11.7 per cent on dairy imports from the EU will apply for a five-year period from February 13, replacing the 21.9 per cent to 42.7 per cent range imposed in a preliminary decision in December, as stated by China’s Ministry of Commerce.
The announced rates are in line with calculations the EU received from Beijing last week. The European Commission said the duties are “unwarranted and unjustified”, and it will evaluate taking all appropriate action including taking the issue to the World Trade Organization.
Sign of stabilising relations
Even so, this is the second time in two months that China has reduced tariffs on EU products imposed after the EU introduced its electric vehicle tariffs, a sign that relations between the world’s second-largest economy and the 27-member bloc may be stabilising after a prolonged period of tensions.
On Wednesday, Brussels agreed to exempt Volkswagen from hefty tariffs on its imports from China, the first such approval, and Chinese carmakers are expected to apply for similar deals.
The originally proposed dairy tariffs would have made European exports prohibitively expensive, and Francois-Xavier Huard, CEO of French dairy industry association FNIL welcomed the step. “It’s a lesser evil that should let us keep a foothold in the Chinese market,” Huard told Reuters.
The new duties will still make it hard for EU producers to compete with those from countries with free-trade agreements with China, according to Alexander Anton, secretary general of the European Dairy Association.