China delays tariffs on EU brandy, easing French concerns

The Chinese Commerce Ministry announced that it will not impose provisional duties on imports of EU brandy, a decision that brings relief to French cognac producers. This announcement comes amid concerns over dumping practices, with Chinese authorities claiming that imported brandy from the EU is being sold at unfairly low prices, threatening the domestic industry. Despite identifying dumping margins between 30.6 and 39 percent, the ministry opted for no immediate anti-dumping measures, likely to ease trade tensions with the EU. This decision follows the EU's own choice not to impose duties on Chinese electric vehicles during an ongoing investigation into state subsidies. The Chinese investigation into brandy appears to be a retaliatory measure against the EU's scrutiny of Chinese EVs. The French cognac sector, which constitutes 99 percent of China’s brandy imports, has been particularly affected by these geopolitical tensions. European Commission spokesperson Olof Gill expressed confidence that cognac exports comply with World Trade Organization rules, questioning the merits of the Chinese investigation. The cognac industry has voiced concerns about being caught in the crossfire of international trade disputes, emphasizing the need for a resolution that does not jeopardize their market. In response to the announcement, shares of French drinks group Rémy Cointreau rose by 8 percent, indicating market relief. China remains a crucial export market for French cognac, second only to the United States, highlighting the importance of maintaining favorable trade relations between the two regions.