China imposes anti-dumping duties on European brandy as trade tensions rise

A Cellerman pulls a pallet of filled kegs to a walk-in refrigerator. (AP / John Minchillo)

BEIJING — China on Friday imposed anti-dumping duties on European brandy, most notably cognac produced in France, as trade tensions between Beijing and United States allies continue to rise.

The tariffs, effective on Saturday, will range from 27.7 to 34.9 per cent, China’s Commerce Ministry said. They are to be in place for five years and will not be applied retroactively.

Chinese authorities agreed to exempt some major cognac makers on condition they maintain their prices above minimum levels.

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The announcement came during a European visit by Chinese Foreign Minister Wang Yi aimed at ironing out trade differences. Wang was set to visit Paris after stops in Brussels and Berlin.

French Foreign Minister Jean-Noël Barrot said he will discuss the issue with Wang when the pair meet later Friday.

The anti-dumping duties are the result of a probe China launched last year into European brandy, after the European Union undertook a probe into Chinese electric vehicles subsidies.

“The investigative authority finally ruled that the dumping of related imported brandy from the EU has existed,” read a statement by China’s Commerce Ministry. “The domestic brandy industry faces a material threat of damage, and there is a causal relationship between the dumping and the substantial damage threat.”

Besides cognac, China has also launched investigations into European pork and dairy products. The brandy probe was the first and targeted mainly French makers of cognac and similar spirits such as Armagnac.

China initially announced provisional tariffs of 30.6 to 39 per cent on French cognac producer Remy Martin and other European brandies after a majority of E.U. countries approved duties on electric vehicles made in China.

Exemptions include French producers Pernod Ricard, Remy Cointreau and Hennessy.

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In a written statement, Barrot praised the “broad scope of exemptions” as “a positive step for many players in the cognac and armagnac industry.”

He noted that “several important points remain unresolved, in particular the exclusion of certain players from the scope of exemptions.”

“We remain fully committed to finding a definitive solution, based on the conditions that existed prior to the investigation,” Barrot added.

Wang’s European tour comes ahead of a China-EU summit to be focused on trade later this month in Beijing.