China won’t impose tariffs on EU brandy to ease tension on electric cars
China said on Thursday it would not impose tariffs on brandy imported from the European Union despite an anti-dumping investigation it opened in January finding that dumping had occurred, giving both sides a respite in tense trade talks.
In a statement, China’s commerce ministry said European distillers had sold brandy in its market of 1.4 billion consumers at a markup of between 30.6% and 39.0% and that its domestic industry had been hurt.
Dumping is a trade practice of selling a product below its normal price or even below its production cost to gain competitive advantages.
China has been lobbying the bloc’s 27 member states to reject the European Commission’s proposal to adopt additional tariffs of up to 36.3% on Chinese-made electric vehicles in a vote in October and the decision not to impose duties on brandy could be seen as helpful to its case.
Shares in French spirits makers Rémy Cointreau and Pernod Ricard rose around 8% after the announcement. Trading in Italy’s Campari was automatically halted in Milan after rising 4.5%.
Pernod Ricard maintains a “cautious” outlook on China despite the country’s decision not to impose provisional “anti-dumping” tariffs, Chief Executive Alexandre Ricard said.
Ricard declined to comment in detail on the decision, which was announced during the company’s annual results presentation.
In addition to the brandy investigation, Beijing has in recent months opened anti-subsidy investigations into dairy and pork products from the EU.
The dairy investigation was launched last week, the day after Brussels published its revised tariff plan for Chinese-made electric vehicles.