China and the European Union (EU) are in a deepening trade dispute after Beijing imposed tariffs of up to 30% on brandy imported from EU countries.
On Tuesday, China’s commerce ministry revealed these new tariffs, which follow an anti-dumping investigation that started in January, concluding that European brandy imports threaten local producers.
The domestic brandy sector in China saw significant growth previously, enjoying a 3.7% annual growth rate from 2017 to 2022, as highlighted by a GlobalData report. However, the post-pandemic market has been tough, with spirits and wine sales dropping 9% and 14%, respectively, last year; beer, conversely, saw a 3% increase, according to the IWSR.
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Additionally, the commerce ministry stated that investigations into European dairy and pork products for potential dumping are also underway.
This announcement follows closely on the heels of the EU implementing duties up to 45% on Chinese electric vehicles (EVs), citing unfair subsidies in China. Chinese EV exports have surged from a 3% market share to over 20% in just three years.
The Chinese commerce ministry criticized the EU for its tariff measures, claiming they violated WTO rules and disrupted global trade. They pledged to take all necessary steps to support local enterprises.
In response, the European Commission plans to contest China’s brandy tariffs at the WTO, labeling them “an abuse of trade defense.” According to Zsuzsa Anna Ferenczy from the Agora Strategy Institute, the EU has been underprepared for such challenges and sees this as a critical moment to collaborate and stand firm against China to ensure fair competition.
The Chinese foreign ministry has not yet issued a response to media inquiries regarding the tariffs.