in retaliation, Beijing decides to impose customs duties on Cognac

Following the surcharges on imports of Chinese cars into Europe, decided by the European Union, Beijing has decided to impose customs duties on Cognac and European Brandy.

This is a real blow for the entire Cognac industry, since in response to the surcharges on imports of Chinese cars into Europe, China has decided to tax Cognac imports. The European Commission promises to support Brandy and Cognac producers. The idea being to release funds for cognac traders who are taking the full brunt of China’s anti-dumping trade measures.

These operators have, in fact, very little time to react. Concretely, to be able to continue to sell their products in China, they must, by October 10, 2024, post provisional deposits which represent 35% tax increases on average. It depends on the houses, but it means that some have to take out large sums of money quickly and have cash flow.

The European Union also promises to challenge these Chinese retaliatory measures before the World Trade Organization (WTO), but the problem is that this challenge can take months. Angry, the Cognac industry is not counting on it and says that it has time to see its business shrink dramatically, because China alone represents, on average, 25% of Cognac exports. For some operators, this can even go up to 60%.

If they are so upbeat, it is because Cognac is becoming the new symbol of the escalation between China and Europe. It is because the European Commission has decided to tax electric vehicles sold in the Union that Beijing is taking revenge on Brandys. The European Union accuses China of distorting competition rules by charging artificially low prices on its electric cars by subsidizing them.

Cognac is not the only one targeted by the Chinese since Beijing also has pork and dairy products imported from the Union in its sights. France is clearly targeted, because it voted for the establishment of barriers to the entry of Chinese cars, while Germany voted against.

The Minister of Agriculture, Annie Genevard, announced that she would receive the Cognac producing houses, but in the meantime, the shares of large producers, flagships, such as Rémi Cointreau or Pernod-Ricard immediately fell on the stock market, Tuesday 8 october.