Dairy Products China News(Dairy Products China News 202507)

Welcome to the July issue of China Dairy News

In July 2025, escalating global trade barriers are jolting the dairy supply chain. Washington's threat to slap an additional 30 % tariff on EU goods gained traction throughout the month, putting France's annual cheese exports to U.S.—worth hundreds of millions—at risk and forcing premium French brands to consider exiting the U.S. market. Ahead of the 1 Aug. deadline, U.S.–India talks descended into chaos over dairy access: New Delhi, citing religious and cultural sensitivities, flatly refused to open its market, while Washington's demand for a 56% cut in Indian soybean tariffs also failed, adding fresh uncertainty to global agri-trade. U.S.–China tariff tensions eased slightly; a 90-day freeze that caps the blended rate at ~30 % expires on 12 Aug. From 27–30 July, Vice-Premier He Lifeng huddled with U.S. officials in Sweden, shifting the focus to non-tariff issues such as rare-earth supply and tech export controls.

China's resilience is on display. In July 2025, the National Development and Reform Commission reported that the "Two Renewals" policy—large-scale equipment upgrades and consumer-goods trade-ins—is delivering tangible results. Trade-in schemes have unlocked robust sales, while investment in equipment and instruments has leapt 17.3% YoY, boosting related manufacturing outlays. Fiscal support includes sizeable allocations from ultra-long special treasury bonds for equipment upgrades and for trade-ins. Financial tools such as the tech-innovation re-lending facility have signed cumulative commitments in the trillions of renminbi, and loan-interest subsidies for equipment upgrades have been fine-tuned. In parallel, 197 new national standards for the "Two Renewals" have been released, and end-of-life recycling networks are being fast-tracked.

Amid cost pressure from volatile global supply chains and tepid demand—exemplified by China Feihe's H1 2025 earnings sliding 47% YoY after its subsidy war backfired—China's dairy sector is accelerating its shake-out in July 2025, yet the bottom of the cycle is also sowing the seeds of the next turn.