Temporary Pause on Tariffs
China has decided not to impose immediate tariffs on European brandy imports, signaling a step toward easing trade tensions with the EU. This decision follows the EU’s recent move to impose tariffs on Chinese electric vehicles (EVs). However, Beijing still accuses the EU of flooding the Chinese market with alcoholic products, leaving the door open for potential future tariffs.
Accusations of Unfair Trade Practices
China’s commerce ministry claims that European brandy is being “dumped” into the Chinese market, causing significant harm to local producers. This announcement comes after China initiated an investigation in January, shortly after the EU began probing Chinese electric vehicles for possible unfair trade practices.
EU Responds to Chinese Subsidies
The European Commission argues that Chinese EV manufacturers benefit from state subsidies that allow them to keep prices low, which undercuts European competitors. To counter these practices, the EU announced plans to impose import duties of up to 36% on Chinese electric cars, though these rates are lower than initially proposed.
Market Reaction to China’s Decision
China’s decision to hold off on brandy tariffs caused a positive reaction in the European spirits market. Shares in major European spirit companies rose on Thursday, with Rémy Cointreau up by 6.4%, Pernod Ricard increasing by 4.3%, and Italian brand Campari gaining 1.58%.
EU’s Commitment to Fair Trade
Olof Gill, a European Commission spokesperson, acknowledged China’s decision but emphasized the EU’s commitment to supporting its industry. He noted that the Commission will continue to monitor the situation and remains confident that European brandy exports comply with World Trade Organization (WTO) rules. He also hinted at potential actions to protect EU exporters if necessary.
SOURCE: Ref Image from South China Morning Post
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