The trade war between the EU and China escalated quickly, with Beijing retaliating against Brussels’ tariffs on Chinese electric vehicles by imposing security deposits on European brandy imports, particularly hitting cognac. The Chinese ministry of commerce warned importers to pay up or face retroactive charges, claiming its domestic brandy industry is at risk. France and the EU plan to challenge these measures at the WTO, despite years of unresolved disputes within the organization.
‘Notification of tax intentions’
The threat had been looming since January, when Beijing began investigating EU wine-based spirits in response to Brussels’ probe into Chinese state subsidies. Chinese manufacturers in sectors like wind turbines have been a concern for European competitors. The wine industry, including cognac producers, protested against potential tariffs, fearing a 35% tax on imports.
The EU’s decision to impose customs duties on Chinese electric cars further strained relations, leading to complaints from the wine industry about being “sacrificed” by the government. The escalating trade tensions between the EU and China are impacting various sectors, with both sides taking measures to protect their industries amidst the ongoing dispute.