China Protects Domestic Dairy Industry with EU Import Tariffs

Background of the Decision

China has officially imposed new import tariffs on dairy products from the European Union, effective December 24, 2025. This policy move is designed to shield the country's dairy farmers from international competition amid chronic oversupply and declining domestic consumption. The Chinese dairy industry has been experiencing financial strain, with four consecutive years of losses according to Yifan Li, Head of Dairy Asia at StoneX.

Industry Challenges

The dairy sector in China has been facing significant challenges, primarily due to excess production capacity and reduced government subsidies in 2025. The economic pressure has been exacerbated by weakening consumer demand, creating a perfect storm for dairy farmers. Li described the industry as having 'bled' due to these pressures, emphasizing that the tariff measure is a direct response to these challenges.

Implications of the Tariff Policy

The introduction of tariffs on EU dairy imports is expected to provide immediate relief to Chinese dairy farmers by reducing competition from imported products. This protectionist measure aligns with China's broader agricultural support policies aimed at maintaining food security and supporting domestic producers. The decision reflects a strategic balancing act between protecting national interests and navigating international trade relationships.