China today imposed temporary anti-dumping measures on cognac imports from the European Union. This is a response to the increase in EU import tariffs on electric cars from China.
This is reported by Reuters.
Chinaʼs measures will hit, in particular, such French brands as Hennessy and Remy Martin.
Chinaʼs Ministry of Commerce said an investigation had preliminarily found that dumping of brandy from the EU would cause "significant harm" to Chinaʼs cognac sector.
Hinting at wider measures, Beijing said an anti-dumping and anti-subsidy investigation into European pork products was ongoing and it would make "objective and fair" decisions once it was completed.
The agency added that it is considering raising tariffs on the import of vehicles with large engines, which will hit German manufacturers the hardest. Exports of cars with engines of 2.5 liters and more to China reached $1.2 billion last year.
From October 11, European brandy importers will have to make guarantee deposits of 34.8 to 39% of the import value. How and when importers will be able to return their deposits is unknown, the Ministry of Commerce of China does not provide details.
Beijing has targeted French cognac as France backed higher tariffs on Chinese electric cars. Last year, France accounted for 99% of Chinese cognac imports — deliveries reached $1.7 billion.
The European Commission stated that even after Chinaʼs retaliatory measures, it is ready to continue negotiations with it.
What preceded
On Friday, October 4, the European Commission voted to increase tariffs on Chinese-made electric cars. This happened after a months-long anti-dumping investigation that found that electric car manufacturers in China are profiting from unfair subsidies that threaten to cause economic losses to European manufacturers.
Although the EU claims that it will continue negotiations with China to "find an alternative solution", the new import tariffs will probably be introduced from the beginning of November, and they will be in effect for five years. Customs duties will reach 45%.
Chinaʼs Ministry of Commerce strongly condemned the European Commissionʼs decision, calling it "unfair and unreasonable" and threatened countermeasures. In particular, it was reported that this year China launched its own investigations into imports of cognac, dairy products and pork from the EU. The Chinese government is also considering raising import duties on cars with large gasoline engines, which would hit German manufacturers the hardest.