Chinese Tariffs on American Dairy Products Will Impact the Global Whey and Lactose Market

China’s decision to impose a 34% import tariff on American dairy products could significantly alter the situation in the global market for dry whey and lactose. Experts from RaboResearch believe this move opens new opportunities for countries in the European Union, the United Kingdom, Oceania, and South America, reports agroportal.ua.

This is reported by AgroReview

It is noted that over 50% of lactose and whey production in the U.S. is directed towards export, with China remaining the largest consumer of these products. The introduction of tariffs may reduce the price competitiveness of American products, while European and British lactose, which costs 2-3 times more than American lactose, is valued for its high quality standard, especially in the pharmaceutical and food industries.

Possible Consequences for the Global Dairy Market

Experts predict that despite the new trade restrictions, American lactose will be able to partially maintain its market position, as has happened before. For instance, in 2019, the U.S. lost 55% of its whey exports to China after a 25% tariff was imposed, significantly reducing producers’ profits.

By the end of 2024, China imported 152,200 tons of lactose, accounting for 43% of the global volume of this trade. Additionally, this country purchases 65% of all exported whey in the world, maintaining a dominant position in the global market.

“The new escalation of trade relations may lead to a drop in prices for American whey, a decrease in producers’ incomes, and an increase in costs for Chinese consumers. In such conditions, EU countries and other suppliers have the opportunity to capture the vacated market shares by offering more expensive but higher-quality alternatives,” experts note.

These considerations highlight the potential consequences of new trade barriers for the global dairy industry and the redistribution of market shares in the future.