In a recent development, the Chinese commerce ministry has announced that a hearing will be held on July 18 to discuss the ongoing anti-dumping investigation into the imports of European brandy. The ministry stated that the probe aims to address claims that European producers are selling brandy at artificially low prices in China, potentially causing harm to the Chinese liquor industry.
This announcement coincides with the implementation of additional provisional tariffs by the European Commission on imports of Chinese-made electric vehicles, ranging from 17.4% to 37.6%. The EU imposed these tariffs in response to what it sees as unfair government support for Chinese car manufacturers flooding the market with cheap vehicles.
The China Association of Automobile Manufacturers, a state-backed association, has expressed strong dissatisfaction with the EU tariffs on Chinese electric vehicles, calling them unacceptable. Analysts are now anticipating retaliatory actions from Beijing in response to these tariffs.
According to Jean-Jacques Guiony, chief financial officer of LVMH, the probe into Europe’s cognac by China is a tit-for-tat reaction to EU actions on Chinese electric vehicles. This move is causing concern among French cognac producers, as France accounted for 99% of China’s imported brandy last year, amounting to $1.74 billion in value.
The anti-dumping probe against European brandy was initiated by the Chinese government in January, believed to be a retaliatory measure against the EU’s investigation into alleged state subsidies for Chinese electric vehicle manufacturers. Talks between the two sides are ongoing, with the possibility of definitive tariffs on Chinese electric vehicles by November if no agreement is reached.
In response to the escalating trade tensions, Beijing has indicated that it will take all necessary measures to protect China’s interests, including potential retaliatory actions against EU pork imports. Bank of America analysts have highlighted the possibility of further probes into EU spirits and warned of potential tariffs on European agricultural goods, aviation, and high-powered cars in the future.
