Beijing hits European cognac with new tariffs in escalating trade spat

China has formally imposed anti-dumping duties on European brandy for a period of five years, intensifying the ongoing diplomatic and commercial rift between the world’s two largest economies.

The decision follows an extensive investigation by Chinese authorities, which concluded that the European Union’s brandy exports were being dumped in the Chinese market, inflicting genuine harm on domestic producers, according to an official statement from China’s Ministry of Commerce, Caliber.Az reports, citing foreign media.

This latest measure compounds the challenges faced by renowned Cognac producers such as Rémy Cointreau SA, Pernod Ricard SA, and LVMH’s Hennessy, whose exports to China have plummeted since Beijing enacted preliminary tariffs last year. The imposition of these duties represents a stark retaliatory move following the European Union’s earlier imposition of tariffs of up to 45% on Chinese electric vehicles.

The anti-dumping duties mark a significant escalation in the tit-for-tat trade actions that have emerged amid deteriorating bilateral relations, reflecting a broader geopolitical struggle between China and the EU. The measures are likely to deepen market disruptions for European luxury spirits companies, given China’s status as a vital and lucrative market for premium brandy and Cognac.

Industry observers warn that the prolonged imposition of tariffs will strain European exporters, potentially prompting a reevaluation of supply chains and market strategies to mitigate the impact of rising trade barriers.

By Vafa Guliyeva