China imposes steep anti-dumping tariffs on European brandy amid escalating trade tensions with the European Union

China has announced new anti-dumping tariffs on European brandy imports, ending a year-long investigation that began in January 2024. The Ministry of Commerce stated that the investigation found evidence of unfair competition, or dumping, by European producers. According to the ministry, this practice threatens substantial harm to China’s domestic brandy industry and there is a direct link between the dumping and the risk of damage.

The new tariffs will range from 27.7% to 34.9% and will apply to companies that do not comply with a price agreement negotiated during the investigation. However, the ministry also confirmed that it has accepted price commitments from several European industry associations and companies. Imports from these companies will be exempt from the anti-dumping duties as long as they adhere to the agreed pricing terms.

A total of 34 companies submitted price commitment requests within the deadline set by Chinese authorities. Among them are some of the most recognized names in the sector, including Martell, Hennessy, and Remy Martin. These companies are major exporters of cognac and armagnac, products for which China is the second-largest export market after the United States.

The decision comes at a time of heightened trade tensions between China and the European Union. Earlier this week, Chinese Foreign Minister Wang Yi was in Europe for the thirteenth EU-China Strategic Dialogue held in Brussels. The timing of China’s announcement coincides with ongoing disputes over tariffs on electric vehicles. The European Union recently imposed its own tariffs on Chinese electric cars, arguing that state subsidies for Chinese manufacturers distort fair competition with European firms.

China’s move to impose duties on European brandy is widely seen as a response to these EU measures. The Ministry of Commerce emphasized in its statement that only those companies failing to meet the price agreement will face the new tariffs starting immediately.

The investigation primarily targeted French producers, who dominate Europe’s brandy exports to China. For these producers, China represents a crucial market, second only to the United States in terms of export volume. Industry analysts note that while some major brands have secured exemptions through price commitments, smaller producers may face significant challenges due to the new tariffs.

The anti-dumping case highlights ongoing friction between Beijing and Brussels over trade practices and market access. Both sides have accused each other of unfair policies in recent months, raising concerns about broader impacts on global trade flows.

As of today, any European brandy producer exporting to China without an approved price commitment faces steep new tariffs. The Ministry of Commerce has published details of the ruling on its official website and indicated that it will monitor compliance closely in the coming months. Industry observers are watching for potential shifts in export strategies as both sides adjust to the new trade environment.