China’s Ministry of Commerce has imposed countervailing duties on imports of certain dairy products originating in the European Union, a measure that takes effect on 13 February 2026 and will run for five years. The final decision follows a year-and-a-half-long investigation that concluded subsidies existed, that China’s domestic dairy sector suffered material injury, and that the subsidies were causally linked to that injury.
The probe was opened on 21 August 2024 under China’s Anti-Subsidy Regulation and resulted in a preliminary determination on 22 December 2025. The ministry recommended countervailing duties to the State Council Tariff Commission, which adopted the recommendation and published the final ruling specifying product descriptions, tariff lines and company-specific duty rates in annexes to the announcement.
The measure targets a broad set of cheeses and milk products — including fresh curd and whey cheeses, processed cheeses, blue-veined varieties and other cheeses, plus certain milks and light cream with fat content above 10% — classified under several import tariff lines (notably HTS codes beginning with 04015 and 0406). The statement says detailed company-level rates are listed in the ministry’s annex; importers must pay duties calculated ad valorem on the customs valuation and inclusion of duties raises the VAT base.
China’s decision includes limited retroactivity: provisional bonds collected from 23 December 2025 through 12 February 2026 will be converted into final duties or partially refunded according to the final rates and scope. Imports landed before the provisional measures are not subject to retroactive duties. The ministry also reminded stakeholders of administrative review and litigation channels available under Chinese law.
For EU exporters the ruling is a significant commercial blow. Europe is a major supplier of specialty cheeses and high-fat milks to China, and company-specific duties (some likely substantial, as indicated by the need for price-commitment diplomacy in other sectors) will raise landed costs, squeeze margins and could divert shipments to other markets. Smaller traders and niche brands that rely on thin margins or just-in-time logistics face acute disruption.
Chinese producers will likely benefit from temporary protection as domestic processors face less competition on price, potentially supporting investment and consolidation in the sector. Consumers, however, may face higher prices for imported cheeses and milk products or reduced availability of some European varieties, accelerating substitution toward domestic or third-country suppliers.
Politically, the move is likely to strain EU–China trade relations at a sensitive moment: both sides have been negotiating and experimenting with tariff and pricing mechanisms in autos and other sectors. The EU could pursue dispute settlement through the World Trade Organization or retaliatory remedies, but such paths are slow and uncertain. In the short term, affected companies will weigh appeals, applications for administrative review, and commercial strategies such as price undertakings, re-routing, or seeking quota arrangements.
Practically, the case underscores Beijing’s increasing willingness to use trade remedies to defend infant or politically important industries while keeping procedural formality — a public investigation, a preliminary finding, a final ruling and a mechanism for review — that mirrors practices in other major economies. Observers should watch whether the EU responds with its own measures or pursues negotiations to secure carve-outs, lower rates or voluntary restraint arrangements for priority suppliers.