Last year, Beijing announced provisional tariffs on European brandies after a majority of EU countries approved duties on electric vehicles made in China.
France’s foreign minister has said that France and China are making progress towards resolving a trade dispute over cognac imports.
Jean-Noël Barrot said the conclusions of a Chinese investigation that could potentially lead to the permanent implementation of provisional duties on European cognac imports have been delayed until June.
“We’ll be really pleased when the problem is behind us. And it’s clear that, step by step, we’re moving towards a resolution,” Barrot said.
Last year, China announced provisional tariffs of between 30.6% and 39% on Rémy Martin and other European brandies after a majority of EU countries approved duties on electric vehicles made in China.
The brandy tariffs are provisional and require importers to make a deposit with the Chinese customs agency for the amount of the tariff.
The move followed a preliminary finding by China’s Commerce Ministry that European brandy was being dumped in China, threatening “substantial damage” to domestic producers.
“The risk faced by the industry until yesterday was that definitive application would be made at the end of the investigation period,” Barrot said.
“Following this visit, I received confirmation that the investigation has been postponed by three months, which rules out the scenario of a sudden application of definitive duties on this sector.”
Tens of thousands of jobs impacted?
According to the sector, China is the largest consumer market for cognac by value.
Experts said the imposition of definitive duties would affect 70,000 direct and indirect jobs, 270 cognac houses and 4,400 winegrowers.
China has opened a series of anti-dumping investigations into European brandy, port and dairy products.
The brandy probe was the first and targeted mainly French makers of cognac and similar spirits such as armagnac.
Barrot said the investigation will be closed after three months and that the Chinese authorities will make decisions based on the results.
“Everyone will continue to work together to put this dispute behind us so that we can move forward on a sound basis,” he said.
French President Emmanuel Macron presented Chinese leader Xi Jinping with two bottles of cognac when the two exchanged gifts during Xi’s state visit to France last year.
