China has raised tariffs on European brandy imports as part of its response to the European Union’s new tariffs on Chinese electric vehicles (EVs). The move comes after the EU approved duties of up to 45% on Chinese EVs.
The EU accuses Beijing of providing subsidies that artificially lower prices and create an unfair advantage for Chinese automakers over European brands.
In retaliation, China has increased tariffs on European brandy by as much as 39%, a decision that could impact some EU liquor brands, particularly those based in France. Chinese officials said preliminary findings of an anti-dumping investigation into EU brandy imports had determined that they “substantially damaged or threatened” China’s own domestic sector.
“I find these measures incomprehensible. There is no justification for them,” French Junior Trade Minister Sophie Primas responded in a statement. “We are very disappointed by this announcement, which goes against the commitment made by President Xi during his visit to France.”
China is the second-largest importer of brandy from the European Union, representing a market for the alcohol valued at over $1.5 billion. France, which backed the EU’s tariff increase on Chinese EVs, is expected to bear the brunt of China’s responding duty hike, as it accounted for 99.8% of the EU’s brandy exports to China last year.
“This announcement clearly shows that China is determined to tax us in response to European decisions on Chinese electric vehicles,” the Bureau National Interprofessionnel du Cognac, a French industry group, said in a statement.
The Chinese government’s response may not stop at brandy. A spokesperson from China’s Ministry of Commerce confirmed that officials are also considering increasing tariffs on European large-engine car imports, signaling further potential measures in the escalating trade tensions.
