EU and China Escalate Trade War with Reciprocal Duties: China Hits Dairy Imports Up to 43% Following EU Chemical Tariffs

Trade tensions between the European Union (EU) and China escalated sharply this week as Beijing levied initial anti-subsidy duties of up to 43% on certain dairy imports originating from the EU, marking the latest retaliatory action in a widening commercial dispute.

China Targets EU Dairy Following Anti-Subsidy Probe

The imposition of duties on EU dairy products, reported on December 22, 2025, follows an anti-subsidy probe initiated by Chinese authorities. While specific details on the scope of the dairy products affected remain under review, the duties—reaching a maximum of 43%—are expected to significantly impact European exporters relying on the massive Chinese market.

This action is widely viewed as a direct response to the EU’s increasingly aggressive stance on alleged unfair trade practices by Chinese manufacturers across several sectors.

The move by China to levy initial duties on some dairy imports from the European Union follows an anti-subsidy probe, the latest move in a tit-for-tat trade dispute with the bloc.

EU Imposes Steep Tariffs on Choline Chloride

Just days before China’s dairy announcement, the European Commission finalized its own protective measures. On December 19, 2025, the EU adopted definitive anti-dumping duties on imports of choline chloride from the People's Republic of China. Choline chloride is a vital chemical compound used primarily in animal feed.

The tariffs adopted are substantial, ranging between 90.0% and 115.9%. This high level of duty is designed to counteract the effects of alleged dumping—selling goods below cost—by Chinese producers in the European market.

European producers of the chemical quickly welcomed the decision. Eastman and Balchem, key choline chloride manufacturers in the EU, issued a joint statement supporting the protective measures.

As producers of choline chloride in the EU, Eastman and Balchem welcome the European Union's decision published on December 19, 2025 to adopt anti-dumping duties between 90.0 and 115.9% on choline chloride imports from the People's Republic of China.

The high tariffs are expected to provide immediate relief to domestic EU producers who have struggled to compete with the heavily discounted Chinese imports.

Broader Context of Escalating Trade Tensions

The reciprocal duties on dairy and choline chloride underscore the deepening trade friction between Brussels and Beijing. This current exchange is part of a broader pattern of investigations and tariffs affecting multiple industries:

• Pork Products: China has previously imposed duties on EU pork products, signaling its willingness to target major agricultural exports from key EU member states.
• Mobile Cranes: The European Commission recently opened an anti-dumping investigation into imports of mobile cranes from China, following complaints from leading European manufacturers concerned about subsidized competition.
• Food and Feed Safety: Separately, the EU has proposed internal measures to simplify food and feed safety rules, aiming to cut costs by an estimated €1 billion, though this is primarily an internal regulatory effort.

Analysts suggest that the current environment represents a significant shift toward protectionism, moving beyond targeted disputes into a broader trade conflict that could disrupt global supply chains. The EU, under pressure from domestic industries, is utilizing its trade defense instruments more frequently, particularly against China, which it views as a major source of subsidized competition.

The tit-for-tat nature of the duties—targeting a chemical input essential for animal feed (choline chloride) and a major EU agricultural export (dairy)—highlights the strategic economic importance of the sectors involved. While the EU’s high tariffs aim to protect its chemical industry, China’s response targets the agricultural sector, potentially impacting farmers and food processors across the bloc.

Market participants are closely monitoring the situation for signs of de-escalation or further expansion of the disputes, particularly whether the EU will proceed with definitive duties on other high-profile Chinese imports, such as electric vehicles, which could trigger a massive response from Beijing.