By D. Maan, Jadetimes News
Beijing Intensifies Anti Dumping Probe on EU Brandy
Beijing has ramped up its anti dumping investigation into imports of European brandy. The Chinese commerce ministry announced it will hold a hearing on July 18 to examine claims that European producers are selling brandy in China at artificially low prices. The hearing aims to address the reasons behind these lower prices and any resultant damage to the Chinese liquor industry.
EU Tariffs on Chinese EVs Spark Retaliation
The announcement of the brandy probe coincided with the European Commission implementing additional provisional tariffs on Chinese made electric vehicles (EVs), ranging from 17.4% to 37.6%. These tariffs are intended to counteract what the EU perceives as unfair government support for Chinese car manufacturers. In response, the China Association of Automobile Manufacturers expressed strong dissatisfaction, labeling the EU tariffs as "unacceptable."
Impact on French Cognac Producers
China’s investigation into European brandy, particularly French cognac, is viewed as a retaliatory measure against the EU's actions on Chinese EVs. Jean Jacques Guiony, CFO of LVMH, which owns Hennessy, noted that the probe is a tit for tat reaction. French cognac producers could face significant challenges if tariffs are imposed, given that 99% of China’s imported brandy, worth $1.74 billion last year, came from France.
Broader Trade Tensions and Future Actions
The anti dumping probe on European brandy, initiated in January, followed the EU's decision to investigate Chinese EV subsidies. The European Commission's recent tariff hike could become permanent by November if no resolution is reached. Beijing has pledged to take "all necessary measures" to protect its interests, potentially targeting EU agricultural goods, aviation, and cars with large engines. Bank of America analysts suggest that findings from China's probe into EU spirits are expected early next year, with potential for additional retaliatory actions against EU imports.
