Spirits: China finally imposes tariffs on EU wine brandy

In the ongoing trade dispute with Brussels, China now officially raises tariffs on winebrand (brandy) from the EU. From July 5, the measure will be due for the spirits at the border between 27.7 and 34.9 percent, as was the result of a message from the Ministry of Commerce. Products from companies that were received by price obligations are therefore excluded from the tariffs if they meet the necessary conditions.

The authority had previously examined whether there was price -dumping at Brandy – that is, whether the drinks were sold cheaper than at usual prices to obtain competitive advantages. As a result, the Ministry of Commerce announced that dumping was available and that the domestic industry was threatening “significant damage”. The measures initially apply for five years.

Who affect the tariffs

The compulsory trade hits more than 60 companies, as can be seen from a list of the Ministry of Commerce. For 34 companies, however, the exceptions applicable due to prices can apply, it said in a further message.

Most affected companies come from France, for which China is an important sales market. Already in October last year, Beijing had prescribed that importers relevant Brandy varieties had to deposit a deposit of 30.6 to 39 percent of the value of the goods at the Chinese customs. The Chinese then extended the ongoing anti-dumping examination, referring to the complexity of the case until July 5.

Beijings’s decision follows shortly after a visit by China’s Foreign Minister Wang Yi in Brussels and Berlin. Paris is also on the Chinese route. With his French counterpart, the topic is likely to be discussed. At the end of March, France’s Foreign Minister Jean-Noël Barrot had already discussed the anti-dumping examination during his visit to Beijing.

Why China examines vineyards

EU representatives always rejected the Chinese dumping allegations. For China, however, the anti-dumping examination against wine brandy is an important deposit in the dispute with Brussels. Because Beijing annoy the EU tariffs to electric cars manufactured in China that have been in effect since autumn last year.

Brussels had justified the surcharges by the fact that China’s manufacturer can sell their vehicles so cheaply in Europe through state subsidies that they distort the market. The measure also hits German companies in parts that manufacture electric cars in China and export them to Europe.

Brussels sees abuse of trade policy instruments

The EU Commission criticized China’s decision on Friday. “We believe that China’s measures are unfair,” said a spokesman in Brussels. They are not compatible and unfounded with the applicable international rules.

The measures are “part of a worrying pattern in which China abuses trade -political protection instruments” and act on the basis of questionable allegations and insufficient evidence. The Commission will now examine the measures carefully and weigh up the next steps in order to protect the interests of the EU industry and the EU economy as best as possible.

Why the decision is made now

In the run-up to Beijing’s wine brandy decision, media reports were already circulating, according to which French Cognac manufacturers had agreed on a minimum import prize for China. However, Beijing wanted to see progress in the case of the electric cars.

The decision is also made a few weeks before a planned EU China summit in Beijing at the end of July. Most recently, the tone between both sides had become rougher again. In Europe, Chinese export controls in particular on seven rare earths and magnets made from them cause resentment.

The raw materials are important for electric motors and sensors. Many companies have already feared production stops. China’s Ministry of Commerce repeatedly emphasized that the lengthy application process accelerated in which the companies had to reveal many details of their products. The authorities gradually granted export permits, but the uncertainty about this prevented many companies from being able to plan more long -term.