China has announced tariffs on EU brandy, primarily targeting French cognac, effective July 5, 2025. This decision will impact major producers and their exports.
Introduction of Tariffs
The Chinese Ministry of Commerce announced duties with a maximum rate of 34.9% for a five-year period, primarily focused on French cognac. China initiated an anti-dumping investigation in January 2024, perceived by many as retaliation for the EU’s high tariffs on Chinese electric vehicles.
Producers' Reaction
Major cognac makers such as Hennessy and Rémy Martin could avoid these duties by agreeing to sell at certain minimum prices. Many in the industry believe they have been caught in a broader trade dispute. Rémy Cointreau described the agreement as a 'substantially less punitive alternative' that would support investment in China.
Exports and Consequences
Since the tariff dispute began, cognac exports to China have dropped by 70%, highlighting the market's significance for French distillers. Shares of French spirits companies reacted differently to the ruling, creating clearer planning grounds moving forward.
The introduction of tariffs on EU cognac presents a significant development for a market heavily reliant on China. As producers negotiate terms, it is crucial to monitor the situation's evolution and potential trade implications.
