Beijing has decided not to impose provisional tariffs on European Union brandy despite finding that it was sold below market prices in China.
The Chinese commerce ministry found that European distillers were selling brandy at a discount of 30.6% to 39%, harming local producers.
However, China will not take immediate anti-dumping measures, potentially using this decision as a negotiating tool in ongoing trade discussions with the EU.
The decision not to impose tariffs could influence the EU’s October vote on additional duties for Chinese electric vehicles.
Barclays analyst Laurence Whyatt suggested that China’s move might be a negotiation tactic aimed at persuading the EU to reconsider its stance on EV tariffs.
The European Commission is closely monitoring the situation and has expressed concerns about the investigation’s fairness, stating it will take necessary actions to defend EU exporters if needed.
French brandy producers, who are heavily impacted by the potential tariffs, have expressed ongoing concerns despite the temporary decision.
The French cognac sector accounts for a significant portion of China’s brandy imports. Shares in French spirit companies initially rose following the announcement but later adjusted as the market assessed the implications.
Beijing’s brandy probe is part of a broader trade dispute, with other sectors like dairy and pork also under investigation.