China is poised to announce provisional punitive tariffs on European brandy as soon as August, marking the first time a timeline for the decision has been provided by state media, citing Vino Joy News.
This move follows an anti-dumping probe into EU-produced brandy that began five months ago.
The announcement comes shortly after the European Union declared it would impose tariffs of up to 38.1% on electric vehicles made in China. According to Yuyuan Tantian (玉渊谭天), a media account known for political commentary with ties to the state-owned broadcaster CCTV, experts familiar with the investigation into brandy have indicated that these provisional tariffs will be introduced before the end of August.
The media outlet emphasized that China will closely monitor the situation and take "all necessary measures" to safeguard its interests. This statement aligns with the European Commission's decision last week to impose significant tariffs on Chinese electric vehicles starting in July.
Yuyuan Tantian has previously been a source for advocating tariffs on EU wines amid ongoing trade disputes involving electric vehicles, solar panels, railways, and security sectors between China and the European Union.
Last year, China imported USD 1.75 billion worth of brandy, accounting for over 60% of its total imported spirits value. Almost all European brandy exported to China is produced in France, with a staggering 99.28% in 2023. Leading producers such as Pernod Ricard, the maker of Martell, LVMH, known for Hennessy, and Remy Cointreau are the biggest exporters to China.
The EU's recent decision concerning Chinese electric vehicles has raised significant concerns among brandy and cognac producers. Industry leaders have voiced their "deepest concern" regarding the potential fallout from China's anti-dumping investigation on European brandy.
Florent Morillon, president of the Bureau National Interprofessional du Cognac, emphasized the industry's apprehension, stating, "We take note of the European decision and once again reiterate our deepest concern regarding the consequences for the anti-dumping investigation launched by China on European brandy."
This potential escalation in trade tensions highlights the intricate interplay between different sectors and the broader economic strategies of both regions. The imposition of tariffs on brandy could severely impact French producers who dominate the market, potentially leading to a significant reshuffling of trade dynamics and economic alliances. As both sides brace for the upcoming decisions, the international trade community watches closely, anticipating the broader implications for global trade relations.
Source: Vino-Joy