China has placed new taxes on dairy products from the European Union. These taxes started on Tuesday. They are between 21.9% and 42.7%. This is a reaction to the EU's taxes on Chinese electric cars. The trade dispute between China and the EU is getting bigger.
The European Commission said China's decision is wrong. A spokesperson said the EU thinks China's reasons are not good. The EU believes China did not have enough proof for these new taxes. The EU had a careful investigation before it taxed Chinese electric cars.
China has taxed EU products before. They taxed brandy and pork from the EU. The taxes on pork were lowered last week. However, the new dairy taxes are more serious. They include famous cheeses from France and Italy.
The main reason for this problem is the EU's investigation into Chinese electric cars. The EU put taxes on these cars. China is now reacting strongly. The dairy taxes come as China and the EU talk about electric car taxes. China might want to put pressure on the EU. Talks were expected to finish last week. No decision has been announced yet.
The European dairy industry will be affected. The new taxes will hurt sales and profits. This shows that important European businesses can be hurt by trade fights. It also shows how connected the world's supply chains are. Big European companies will watch this closely.
The situation is not final yet. The dairy taxes are provisional. This means they could change. China has changed its trade rules before. However, there is a lot of distrust now. It is not certain when this trade problem will end. European officials are trying to find a way to talk. They want to reduce trade barriers. The next few weeks will show if this leads to more problems or better talks.