China has officially reduced tariffs on dairy imports from the European Union as a result of a lengthy 18-month investigation into dumping and subsidy practices. The newly adjusted tariffs will now range between 7.4% and 11.7% for a duration of five years, starting from February 13. This decision marks a significant drop from the initially proposed tariffs, which were much higher, ranging from 21.9% to 42.7%, as stated in the preliminary ruling issued in December of the previous year.

The investigation, which commenced in August 2024, was initiated by China in retaliation for the European Union's tariffs on Chinese electric vehicles amid escalating trade tensions between Beijing and Brussels. This latest adjustment underscores the complex and increasingly contentious relationship between the two economic powers, especially as this is the second time in two months that China has lowered tariffs targeting European products, following similar actions in response to the EU's restrictions on Chinese electric vehicles.

As the negotiations continue on various trade fronts, the implications of these tariff reductions are significant for both EU dairy exporters and the broader trade dynamics between China and Europe. Lower tariffs may improve market access for European dairy products in China, potentially enhancing competitive positioning amidst ongoing trade disputes. This decision symbolizes a cautious diplomatic maneuver by China in the midst of reducing friction with the EU while simultaneously asserting its trade interests.