EU Says It Will Challenge China’s Brandy Tariffs at WTO

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Oct 9, 2024 - 10:04 Updated: Oct 9, 2024 - 09:58
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EU Says It Will Challenge China’s Brandy Tariffs at WTO

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Beijing’s decision to impose provisional tariffs on brandy shipped from the EU comes four days after Brussels voted to impose extra tariffs on EVs made in China

The European Union (EU) will file an appeal at the World Trade Organization (WTO) over Beijing’s decision to impose anti-dumping measures on brandy shipped from the bloc, the EU’s executive arm said on Oct. 4.

Olof Gill, the European Commission’s trade spokesperson, announced the decision hours after China’s Ministry of Commerce said importers would be required to pay what they call a deposit to Chinese customs when bringing in brandy from the EU.

“We believe that these measures are unfounded, and we are determined to defend [the] EU industry against abuse of trade defense instruments,” Gill said in a statement.
In a later statement, the commission said it would explore all options to provide the necessary assistance to EU producers facing the negative impact of this “unwarranted decision” by the Chinese regime.

According to the plan unveiled by China’s commerce ministry, Beijing set security deposits ranging from 30.6 percent for Martell products to 39 percent for Hennessey. These measures will take effect on Oct. 11.

The decision marks a policy reversal for the Chinese regime.

In August, Beijing’s commerce ministry said in a statement its preliminary investigation found that some European alcohol was being dumped into the Chinese market, threatening to pose “substantial damage” to its domestic market. The ministry added it decided not to impose any anti-dumping measures during its probe.

The scrutiny of European liquors was widely viewed as targeting France, the main backer of imposing additional duties on Chinese EVs. According to the Bureau National Interprofessionnel du Cognac (BNIC), which represents cognac makers in France, over 95 percent of European brandy exported to China comes from France, with cognac and Armagnac being the primary products.

French President Emmanuel Macron called China’s probe of European alcohol “a pure retaliation” while reaffirming his support on Oct. 2 for the Commission’s EV tariff proposals.

“When you deal on the same market with people competing with you, with such a level of subsidies, which completely makes the market unbearable for your own player, you have to correct it. This is why I do support the Commission on electric vehicles with China,” Macron said at the Berlin Global Dialogue event.

Macron deemed the EU’s tariffs necessary to level the playing field with Chinese automakers.

“I insisted that if you don’t preserve a level playing field, just don’t hope that you produce and preserve your industrial footprint in Europe,” Macron said.

The European Commission said on Oct. 4 that it received the necessary support to move forward with its tariff proposals. Meanwhile, discussions with Chinese officials are ongoing to find alternative measures that would be adequate in addressing what Brussels called “injurious subsidization“ by Beijing for Chinese electric vehicle production.

If no consensus is reached, the final duties of up to 36.3 percent on Chinese EVs will become effective by the end of this month and remain in place for a five-year period.

China has repeatedly expressed its displeasure against the EU’s tariff plans, and in a separate statement on Oct. 8, the commerce ministry said its anti-subsidy reviews of pork and dairy products from the bloc are ongoing.

“At the same time, China is exploring measures such as raising tariffs on large engine petrol-powered vehicles” imported from the EU, the ministry said, adding that the regime would take necessary measures to “firmly defend” interests of Chinese industries and enterprises.

The EU has filed a complaint with the WTO over Beijing’s probe into its cheese, milk, and cream products, saying the probe is based on “questionable allegations” and “insufficient evidence.”
During a meeting last month with Chinese commerce minister Wang Wentao, the EU’s trade commissioner Valdis Dombrovskis urged the regime to put an end to its series of trade investigations into EU products.

“[The] EU will do its utmost to defend the interests of its industries,” Dombrovskis told Wang in Brussels.

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