France and China are reportedly progressing towards resolving their trade issues regarding cognac imports, according to France’s foreign affairs minister. An ongoing Chinese examination, which could result in permanent customs duties on European cognac, has been extended by three months, now concluding in June.
The provisional taxation, suggested last year by China, could hurt French brandies like Remy Martin with tariffs between 30.6% and 39%. This came after most EU nations supported tariffs against Chinese-made electric vehicles. Such temporary measures require importers to deposit the tariff amount with Chinese customs. The provisional decision arose from China’s Commerce Ministry, finding European brandy dumped in China, potentially harming local producers.
“The industry has been keenly aware of the risk that these might become permanent,” the minister remarked. “With this recent development, it’s clear there’s a shift towards resolving the matter.” Following discussions, the conclusion of this investigation now extends for an additional three months, eliminating the threat of abrupt permanent duties on the industry.
China represents the largest consumer market by value for cognac globally. Industry specialists point out that definitive tariffs could impact 70,000 jobs, affect 270 cognac firms, and touch 4,400 winegrowing businesses.
Beyond cognac, China has commenced anti-dumping probes into several European goods, including pork and dairy items. This brandy investigation initially focused on French products like cognac and Armagnac. It’s anticipated that the review will wrap up in three months, leading to results-driven decisions from Chinese authorities.
“It is essential that all parties collaborate to resolve this issue, allowing for future progress based on solid ground,” the French minister stated. Last year, as a mark of goodwill, French President Emmanuel Macron gifted Chinese President Xi Jinping two bottles of cognac during Xi’s state visit to France.