China's Brandy Battle: New Tariffs and Trade Talks

Trade tensions escalate as China imposes new anti-dumping duties on European brandy, particularly French cognac. This follows an extensive investigation into whether European brandy was being sold at unfairly low prices, impacting local producers.

Tariffs and Exemptions

• Effective tomorrow, tariffs ranging from 27.7% to 34.9% will be in place for five years.
• Past sales are exempt.
• Major cognac producers like Pernod Ricard and Hennessy are spared but must maintain prices above a certain threshold.

Diplomatic Moves

• French President Emmanuel Macron calls exemptions a positive first step, vowing to continue protecting the brandy industry.
• Chinese Foreign Minister Wang Yi is in Europe (Brussels, Berlin, and heading to Paris) to ease tensions.
• French Foreign Minister Jean-Noël Barrot plans talks with Wang, acknowledging progress but stressing ongoing concerns.

Broader Trade Conflicts

• China is also probing European pork and dairy products.
• The brandy dispute stems from the EU's investigation into Chinese electric vehicle subsidies.
• A major trade summit between China and the EU is scheduled later this month in Beijing.

Outlook

The brandy battle underscores growing trade tensions between China and Western allies. While diplomatic efforts continue, the path to resolution remains uncertain.