China imposes EU brandy tariffs as trade dispute escalates

Imports and Exports | MIC Customs Solutions

China has responded to European nations' approval of EV tariffs by adding new import duties to EU brandy.

The Chinese government has announced new tariffs on imports of brandy from the EU as a growing trade dispute between the two territories escalates.

Beijing said that as of Friday October 11th, importers of the spirit will have to pay additional duties of as much as 39 per cent. The move comes just days after EU members voted to approve a range of import tariffs on Chinese-made electric vehicles (EVs).

According to the Chinese commerce ministry, the move has been taken on anti-dumping grounds after an internal investigation determined that subsidized brandy imports threaten "substantial damage" to the country's own drinks sector. However, commentators have widely regarded it as a tit-for-tat retaliation to the EU's EV tariffs.

In a statement, France - which accounts for 99 per cent of brandy exported to China - called the move "incomprehensible" and in violation of global trading agreements. It added the country will work with the European Commission (EC) to challenge the tariffs at the World Trade Organization.

The EC said the move is a "clear breach" of WTO rules, adding that it will consider all possibilities to support spirit makers impacted by the tariffs.

It also stated: "The Commission will always stand firmly and fearlessly on the side of EU producers, industry, open and fair trade, and a global level playing field."

The move is also unlikely to be the last measure taken by Beijing in response to the EU's vehicle tariffs. The country is already conducting a similar anti-dumping investigation into imports of EU pork products and, in a separate statement this week, stated it will make "objective and fair" decisions based on the conclusions of the probe.

It also floated the possibility of adding import duties on petrol vehicles from the EU, particularly for cars with larger engines. This would especially hit countries such as Germany which exported $1.2 billion of such vehicles to China last year, according to Reuters.