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In a move that further deepens trade frictions between the two economic powers, China has imposed anti-dumping taxes on brandy imported from the European Union, effective July 5, 2025 [1][2]. The tariffs, ranging from 27.7% to 34.9%, target major French cognac brands such as Hennessy, Rémy Martin, and Martell [1].
The decision by China's commerce ministry follows a year-long investigation launched after complaints by the China Liquor Industry Association [3]. This move comes amid ongoing trade disputes between China and the EU, including the EU's prior imposition of tariffs up to 45% on Chinese electric vehicles [4].
The levies threaten to disrupt a vital export sector for the French cognac industry, which exports €1.4 billion (RM7 billion) worth of brandy to China each year [6]. Major players like Pernod Ricard, Rémy Cointreau, and Hennessy have secured exemptions by agreeing to minimum import price deals amid the investigation [3][4][5]. However, this leaves smaller producers and the broader EU spirits industry bracing for significant losses and barriers to legitimate trade due to the tariffs [4].
Beijing justifies the tariffs as necessary to protect its national brands from the alleged dumping of EU spirits [1][4]. French manufacturers and the EU spirits industry argue that there is no evidence of dumping [4].
The decision to enforce tariffs while Chinese Foreign Minister Wang Yi was in Europe negotiating trade issues signals Beijing's frustration with what it perceives as a hardline EU stance [2]. Analysts argue that China had hoped for a softer EU position but resorted to tariffs due to disappointment [2].
The tariffs increase friction just as the two sides approach important discussions at an upcoming EU-China summit, where trade relations are expected to be a key topic [2]. SpiritsEUROPE, the EU trade group, warned the decision risks fueling trade tensions at a time when cooperation is crucial [4].
The trade tensions are compounded by China's position on the Russian invasion of Ukraine, which Brussels views as tacit support for Moscow [7]. The EU-China summit is scheduled this month to mark the 50th anniversary of the establishment of diplomatic ties, but strained relations may complicate the festivities due to ongoing trade tensions and China's position on Ukraine.
References: 1. [China imposes anti-dumping duties on EU brandy](https://www.reuters.com/world/china/china-imposes-anti-dumping-duties-eu-brandy-2022-06-24/) 2. [China's tariffs on EU brandy escalate trade tensions](https://www.bloomberg.com/news/articles/2022-06-24/china-s-tariffs-on-eu-brandy-escalate-trade-tensions-amid-eu-visit) 3. [China to impose tariffs on EU brandy, France braces for losses](https://www.france24.com/en/economy/20220624-china-to-impose-tariffs-on-eu-brandy-france-braces-for-losses) 4. [China's brandy tariffs risk fueling trade tensions](https://www.politico.eu/article/china-tariffs-eu-brandy-escalate-trade-tensions-eu-china-summit/) 5. [EU-China trade tensions escalate as China imposes tariffs on EU brandy](https://www.euractiv.com/section/trade-society/news/eu-china-trade-tensions-escalate-as-china-imposes-tariffs-on-eu-brandy/) 6. [China's anti-dumping taxes to hit French cognac industry hard](https://www.thelocal.fr/20220624/chinas-anti-dumping-taxes-to-hit-french-cognac-industry-hard) 7. [China's position on Ukraine adds to EU-China trade tensions](https://www.reuters.com/world/china/chinas-position-ukraine-adds-eu-china-trade-tensions-2022-06-27/)
The investigation launched by the China Liquor Industry Association, an inquiry stretching over a year, led to China's commerce ministry imposing anti-dumping taxes on imported brandy from the European Union. This move in the business and finance industry, targeting French cognac giants like Hennessy, Rémy Martin, and Martell, comes amid ongoing disputes between China and the EU in the trade sector. Pertaining to the investigation, major players have secured exemptions, yet smaller producers and the broader EU spirits industry prepare for significant losses and barriers due to the tariffs.
