China Delays EU Brandy Tariffs, Accuses Producers of Dumping and Causing Damage
China announced on August 29 that it will not impose tariffs on EU brandy for the time being, indicating a possible reduction in trade tensions with the European Union. However, a preliminary investigation has uncovered evidence of dumping regarding European brandy imports, potentially jeopardizing China’s domestic market.
Launched on January 5, the anti-dumping probe revealed that EU brandy imports pose a significant risk to China’s local industry, as stated by the Ministry of Commerce. The authority preliminarily concluded that imported brandy from the EU is being dumped in the Chinese market, which threatens substantial harm to local producers. Despite this, China decided against implementing provisional anti-dumping measures, although EU brandy could still face average duties of 34.8%.
This potential tariff could have a severe impact on the French cognac industry, which constitutes the majority of brandy imports from the EU. Following the announcement, shares of French spirit companies Rémy Cointreau and Pernod Ricard increased, according to reports.
However, SpiritsEurope, the EU trade association, expressed disappointment at the decision, highlighting the ongoing threat of tariffs. The association’s director general, Ulrich Adam, argued that such tariffs would unfairly restrict market access and harm EU exports of spirits to China, which account for about 90% of the EU’s spirits export value to the country.
Adam also emphasized that the brandy sector demonstrated that the grounds for initiating the investigation were not justified, labeling it a “collateral victim” of broader trade disputes. Olof Gill, a spokesperson for the EU Commission on trade and agriculture, stated that the merits of the investigation are questionable and confirmed the bloc’s readiness to take all necessary steps to protect EU exporters.
This recent scrutiny follows other anti-dumping investigations by China targeting EU agricultural products, including dairy and pork. These investigations are primarily focused on subsidies provided under the EU’s Common Agricultural Policy (CAP), which China has criticized for resulting in unfair pricing on exports.
Experts suggest that while threats of retaliatory tariffs on EU agricultural products exist, such tensions are unlikely to escalate into a larger trade conflict. Concurrently, the European Commission has announced preliminary tariffs on electric vehicles from China, albeit with reductions from initial proposals.
EU farming associations have expressed concern about being embroiled in these trade tensions, which they attribute to issues that do not directly involve agriculture. They emphasize that theirexports adhere to EU and WTO regulations and lament being targeted due to unrelated disputes.
SOURCE
John Peterson graduated with a degree in Agricultural Sciences from Wageningen University in the Netherlands. His specialization is in sustainable crop production and soil health management. John is passionate about integrating modern technology with traditional farming methods to enhance productivity while preserving the environment. He currently works as a consultant, helping farmers adopt sustainable practices.