China decides not to impose tariffs on EU brandy — for now

BRUSSELS — While EU companies are dumping brandy on the Chinese market, Beijing will not impose provisional duties against imports of the European alcohol, the Chinese Commerce Ministry announced on Thursday. 
“There is dumping of the relevant imported brandy originating from the EU [and] the domestic relevant brandy industry is threatened with substantial damage,” the Ministry concluded in its press release. However, “[n]o temporary anti-dumping measures will be taken in this case for now.”
Claiming there are dumping margins of between 30.6 and 39 percent, Chinese authorities held back from hiking duties in a move likely to be seen as an attempt by Beijing to de-escalate trade tensions between the EU and China.
Beijing’s decision comes after the EU decided not to impose provisional and retroactive duties on made-in-China electric vehicles (EVs) during its own probe. Chinese President Xi Jinping had also committed during a May visit to Paris not to impose duties until the probe’s conclusion in January 2025.
The Chinese investigation was seen as retaliation to Brussels’ investigation into state subsidies into Chinese EVs. The move clearly targeted the French luxury cognac brands that make up 99 percent of China’s imports of those liquors.
Responding, European Commission spokesperson Olof Gill said: “We remain fully confident that our cognac exports to China are completely in line with all applicable [World Trade Organization] rules.” He added:  “According to the Commission’s detailed assessment, the merits of this investigation are questionable.”
The sector has repeatedly warned that it shouldn’t be taken hostage of the geopolitical tensions between Beijing and Brussels. In a sign of market relief at the Chinese announcement, shares in French drinks group Rémy Cointreau rose by 8 percent Thursday.
China is the second biggest export market for the French cognac sector, after the United States, according to figures provided by the BNIC, France’s cognac governing body.
This story has been updated with comment from the European Commission.