China has imposed provisional tariffs on European brandy following the approval of duties on Chinese electric vehicles by the European Union. Chinese drinkers may soon see an increase in prices for European brandies like Remy Martin, as the government announced tariffs ranging from 30.6% to 39% on these liquors. This decision came just four days after a majority of EU countries gave the green light to impose duties on electric vehicles manufactured in China.
The move is seen as a tit-for-tat strategy that could potentially give Chinese negotiators leverage in discussions with the EU aimed at reducing or eliminating the tariffs on Chinese electric vehicles, which are set to come into effect at the end of the month. These provisional tariffs on brandy will require importers to make a deposit with the Chinese customs agency for the corresponding percentage, with enforcement starting on Friday.
China’s Commerce Ministry had previously conducted a preliminary investigation which found that European brandy was being dumped in China, posing a threat of “substantial damage” to domestic producers. This probe into brandy imports from Europe is part of a series of investigations launched by China, including those into pork and dairy products, in response to the EU’s investigation into Chinese electric vehicle exports that began a year ago.
The focus of the brandy investigation mainly targets French producers of cognac and similar spirits such as Armagnac. While France has been in support of the probe into Chinese-made electric vehicles, Germany has expressed opposition due to concerns about potential retaliation in the Chinese market against its own automakers. The provisional tariffs on European brandy vary by brand, with examples including a 30.6% tariff on Martell products, 38.1% on Remy Martin, and 39% on Hennessy. These tariffs will affect numerous companies, including some Spanish producers.
During a state visit by Chinese leader Xi Jinping to France in May, French President Emmanuel Macron presented him with two bottles of cognac, highlighting the significance of the spirit in diplomatic exchanges. The ongoing trade tensions between China and the EU underscore the complex interplay of international trade relations and the impact on various industries.