In response to the European Union’s decision to raise tariffs on Chinese electric vehicles, China has launched an investigation into the dairy subsidies provided by the EU and several member states. The probe, which examines the EU’s Common Agricultural Policy and the national plans of eight countries, has the potential to reshape the global dairy trade. Heightened trade tensions could offer opportunities for dairy exporters from Australia, New Zealand, the UK, and the US, while creating obstacles for European exporters. According to a recent RaboResearch report, any significant market impact may not be seen until 2026, if at all.
China’s domestic dairy industry is currently facing overproduction, prompting a shift toward value-added dairy products to manage the surplus and reduce dependence on imports. The trade dispute with the EU could unintentionally speed up this transition, benefiting local Chinese producers and exporters from other countries.
