China to Impose Up to 34.9% Tariffs on European Brandy Imports

China’s Commerce Ministry announced on Friday that it will impose duties of up to 34.9% on brandy imported from the European Union, starting July 5 and lasting for five years. The move follows the conclusion of an investigation into European brandy imports, most of which are French cognac.

Some EU producers that agreed to minimum price commitments, including Martell & Co (owned by Pernod Ricard) and Remy Martin (owned by Remy Cointreau), will be exempt from the full tariff rate, provided they adhere to those commitments. Breaches could result in the higher tariffs being applied.

Tensions Escalate Over Trade Disputes

The tariff decision comes amid an ongoing trade dispute between Beijing and Brussels, largely centered around electric vehicles. The EU recently imposed duties on Chinese-made EVs, alleging unfair state subsidies. In response, China began probing EU brandy imports late last year, culminating in this final ruling.

French cognac producers have voiced frustration at becoming entangled in the broader dispute. Monthly cognac exports to China—the world’s most valuable market for the spirit—have dropped by up to 70% due to the escalating tensions, according to the Bureau National Interprofessionnel du Cognac (BNIC).

Tentative Deal on Import Prices Yet to be Finalized

Last week, reports emerged that French cognac producers had reached a preliminary agreement on minimum import prices for the Chinese market. However, Chinese officials indicated that the deal would only be finalized if the EU made progress on resolving its tariffs on Chinese EVs.