France and Italy are the main victims of the anti-subsidy investigation launched by China against some dairy products imported from the European Union, in response to the tariffs imposed by Brussels on Chinese electric vehicles. This is according to data from the General Administration of Customs of the People’s Republic of China (GACC).
According to data provided by the GACC, considering the categories included in the survey, France leads the European dairy exporters to China, with a value of 211.5 million dollars in 2023 and an additional 115.3 million dollars between January and July this year. In second place is Italy, which exported cheese worth 64.9 million dollars last year, to which 43.2 million dollars are added in the first seven months of 2024. The list of major exporters also includes Denmark, the Netherlands and Spain.
**The Context of China’s Decision**
As often happens in trade disputes, the repercussions of decisions taken in Brussels fall on the productive sectors of other member countries. Less than 24 hours after Ursula von der Leyen, President of the European Commission, announced new duties against Chinese electric vehicles, Beijing responded by launching an investigation into European dairy products. This signal of retaliation recalls previous actions, such as those imposed on cured meats and pork, which significantly slowed European exports to the Chinese market.
China, which recently saw a 43% increase in imports of Italian cheese, has overtaken Canada to become the fifth largest market outside Europe for high-end Italian products, with purchases worth a total of €560 million. This makes the Chinese market the second most important for Italy in Asia, after Japan. The impact on Italian dairies is not negligible, given that approximately €1.5 billion of the sector’s foreign turnover comes from countries outside the European Union.
**Implications for the Italian Food Industry**
China’s response was predictable, given the recent escalation in trade tensions between the European Union and China. When it became apparent in March that Chinese electric cars were undercutting European vehicles, the EU began considering measures to protect its own auto industry. However, these measures triggered Chinese retaliation that now threatens industries far beyond the automotive sector.
The Italian dairy industry, already hit in the past by trade disputes such as sanctions on Russia and the US-EU dispute over Boeing and Airbus aircraft, is once again exposed to punitive tariffs that could effectively close the Chinese market for Italian cheeses. The EU is currently the second largest exporter of dairy products to China, after New Zealand, but Italy is one of the countries experiencing the fastest growth in this market.
**The Future of Agri-Food Trade with China**
It should also be noted that Italian products, especially PDO cheeses, are considered ambassadors of quality Italian agri-food. With the growth of wine exports in the first four months of 2024 (+4%, exceeding 100 million in turnover), the Italian agri-food sector was gaining ground in China. However, the prospect of more severe duties risks nullifying this progress.
Paolo Zanetti, president of Assolatte, had already anticipated the difficulty of competing in a context of international trade disputes that often unfairly penalize Italian producers. As he recently stated, “we are often hit by trade disputes that have nothing to do with us: first the sanctions against Russia, then the US-EU dispute over the Boeing-Airbus affair, and now the duties with China where we were doing very well. Should we perhaps sell only in Europe, leaving the other 7.5 billion people alone? Unfortunately, we live on empty promises”.
The repercussions of these trade tensions are complex and extend far beyond the automotive sector, also deeply affecting the Italian agri-food sector, which now faces new challenges in one of its most promising export markets.
