Economy: China finally imposes tariffs on EU brandy

Beijing. In the ongoing trade dispute with Brussels, China is now officially imposing tariffs on brandy from the EU. The measure will impose surcharges of between 27.7 and 34.9 percent on the spirits at the border starting July 5, according to a statement from the Ministry of Commerce.

Products from companies that have entered into price commitments are therefore exempt from tariffs if they meet the necessary conditions.

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The agency had previously investigated whether price dumping of European brandy was occurring—that is, whether the beverages were being sold at lower than market prices in order to gain a competitive advantage. The Ministry of Commerce concluded that dumping was occurring and that the domestic industry was at risk of "significant harm." The measures will initially apply for five years.

The trade constraint affects more than 60 companies, according to a list from the Department of Commerce. However, 34 of these companies qualify for exemptions under price commitments, according to a further statement.

Most of the affected companies are from France, for which China is an important sales market. As early as October of last year, Beijing had decreed that importers of relevant brandy varieties must deposit a security deposit of 30.6 to 39 percent of the value of the goods with Chinese customs. The Chinese subsequently extended the ongoing anti-dumping investigation until July 5, citing the complexity of the case.

Beijing's decision comes shortly after Chinese Foreign Minister Wang Yi visited Brussels and Berlin. Paris is also on the Chinese foreign minister's itinerary. The issue is likely to be raised with his French counterpart. French Foreign Minister Jean-Noël Barrot had already addressed the anti-dumping investigation during his visit to Beijing at the end of March.

EU representatives have previously consistently rejected the Chinese dumping allegations. However, for China, the anti-dumping investigation into brandy is an important asset in its dispute with Brussels. Beijing is annoyed by the EU tariffs on Chinese-made electric cars, which have been in effect since last fall.

Brussels justified the surcharges by arguing that state subsidies allow Chinese manufacturers to sell their vehicles so cheaply in Europe that they distort the market. The measure also partially affects German companies that manufacture electric cars in China and export them to Europe.

In the run-up to Beijing's brandy decision, media reports circulated that French cognac producers had agreed on a minimum import price for China. However, Beijing reportedly wanted to see progress on electric cars in return.

The decision also comes just weeks before a planned EU-China summit in Beijing at the end of July. Recently, the tone between the two sides had become harsher again. In Europe, Chinese export controls on seven rare earth elements and magnets made from them are causing particular discontent.

The raw materials are important for electric motors and sensors. Many companies already feared production stoppages. China's Ministry of Commerce repeatedly emphasized the need to speed up the lengthy application process, which required companies to disclose many details about their products. Although the authorities gradually granted export licenses, the uncertainty surrounding them prevented many companies from planning for the long term.

RND/dpa