China will grant major French cognac manufacturers an exemption from new anti-dumping duties on EU brandy products which will protect Pernod Ricard and LVMH and Rémy Cointreau from trade tensions with Brussels.
The Chinese government will impose 34.9% duties on most EU-origin brandy imports beginning Saturday but producers who meet undisclosed minimum price requirements will avoid these duties. The Chinese government made this exception during a time when the EU continues to implement tariffs on electric vehicles made in China.
The Chinese commerce ministry will return the deposits that companies paid since October when provisional duties were implemented which will reduce pressure on smaller producers. The refund of deposits proved essential during the recent diplomatic talks according to industry representatives.
The $3 billion global annual exports of French cognac faced significant danger from China’s investigation which many experts interpreted as a response to EU electric vehicle tariffs. The Chinese market stands as the leading destination for high-end liquors because it consumes the most valuable imported spirits.
Rémy Cointreau stated that the agreement brings a “substantially less punitive” outcome which allows them to continue investing in China. The temporary exemption for French spirits producers does not address the ongoing trade disputes between Brussels and Beijing.
