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China taxes European brandy after EU's duties on Chinese EVs

BEIJING, China: Chinese consumers may soon pay more for European brandies like Remy Martin, following China’s decision to impose provisional tariffs ranging from 30.6 percent to 39 percent on imported liquor.

The tariffs, announced on October 8, come just days after the European Union approved duties on Chinese electric vehicles (EVs), escalating trade tensions between the two economies.

The move allows China to gain leverage in ongoing negotiations with the EU, which plans to implement tariffs of up to 35.3 percent on Chinese-made EVs by the end of the month. The newly imposed brandy tariffs are provisional, requiring importers to deposit the equivalent amount with Chinese customs starting October 11.

China’s Commerce Ministry stated that the decision was based on a preliminary investigation conducted in August, which found that European brandy was being dumped in China, causing significant harm to local producers. The investigation mainly targets French cognac makers, such as Remy Martin and Hennessey, as well as other European spirits like Armagnac.

This development is part of a broader series of anti-dumping investigations initiated by China in response to the EU’s ongoing probe into Chinese EV exports. France has supported the EU’s scrutiny of Chinese-made electric cars, while Germany, whose automakers have a large presence in China, has opposed it.

In addition to the brandy tariffs, China is also considering raising duties on imported cars with large engines, further signaling its intent to counter the EU’s measures.

The specific tariffs vary by brand, with Martell facing a 30.6 percent tariff, Remy Martin at 38.1 percent, and Hennessey at 39 percent. These tariffs apply to multiple companies across Europe, including some in Spain. This trade spat could have significant impacts on both industries, as Chinese consumers may face higher prices on popular European imports, while Chinese automakers could face greater challenges in the European market.

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