China targets French brandy after EU approves tariffs on electric cars

After Brussels voted to impose additional tariffs on Chinese electric car manufacturers, China will begin to impose tighter restrictions on brandy imports from the European Union.

Beijing's new measures, which will come into force on 11 October, concern almost exclusively France, as it accounts for 99 % of Chinese imports of the grape spirit.

China's Ministry of Commerce said that an investigation has preliminarily found that dumping of brandy from the European Union threatens "significant damage" to its own industry.

French brandy shipments to China reached $1.7 billion last year, and France is considered a major target of Beijing's brandy investigation. Paris supports the European Union's upcoming tariffs on electric cars made in China.

Cognac's national interdisciplinary office expressed regret at the news from China: "This announcement comes at a time when the Chinese authorities have announced that they do not intend to levy provisional duties before the investigation is concluded, showing that their stance has hardened. In the face of this development, the French authorities cannot leave us alone to face Chinese retaliation that does not concern us. As we have been saying for months, the impact of these taxes would be disastrous for our industry and our regions."

Naked protectionism

China has called the European Union's tariffs on Chinese electric vehicles an example of "naked protectionism", while the French president Emmanuel Macron said the Chinese investigation into brandy was "pure retaliation".

The EU says tariffs on electric cars are necessary to maintain a level playing field, but has reacted sharply to China's levy on brandy. "The EU takes with the utmost seriousness any unfair use of trade defence instruments against any sector of our economy," the statement said.

"The abuse of trade defence for improper reasons is a clear violation of WTO rules. The Commission will therefore strongly challenge at WTO level the announced imposition of provisional anti-dumping measures by China on EU brandy imports."

Importers of brandy from the EU will be required to pay a bond, which is usually between 35 and 39 % of the import value.

And in a further sign of the growing trade tensions between Brussels and Beijing, the Chinese ministry added that the ongoing anti-dumping and anti-subsidy investigation into EU pork products will make an "objective and fair" decision when it is completed.

CGTN/ gnews - RoZ