China intensifies trade war with EU, targets European brandy imports

CHINA – China has announced the next step in its anti-dumping investigation into European brandy imports on the same day the European Commission’s provisional tariffs on Chinese-made electric vehicles (EVs) took effect.  

This development further complicates the already strained trade relations between Brussels and Beijing. 

Ahead of the European Union confirming tariffs of up to 37.6 percent on Chinese-made EVs, a spokesperson from China’s commerce ministry emphasized the importance of continued negotiations.  

However, the spokesperson hinted at possible retaliatory actions, mentioning an ongoing investigation into EU pork imports. 

The commerce ministry revealed plans to hold a hearing on July 18 to discuss allegations that European brandy producers are selling their products in China at below-market rates.  

Representatives from major brands, such as Martell, Remy Martin, and Hennessy, are expected to attend the meeting in Beijing. This will be their first opportunity to defend themselves in person against the dumping claims. 

China has repeatedly urged the EU to cancel its EV tariffs and expressed a willingness to negotiate.  

Already affected by US tariffs, China has stated that it does not want to be involved in another tariff war but is prepared to take necessary steps to protect its firms.  

The provisional EV tariffs, which have a four-month window, are subject to intensive discussions between the EU and China during this period. 

The hearing on European brandy will occur just two days before the deadline set by Brussels for EV makers to comment on the provisional tariffs.  

In January, Beijing initiated an anti-dumping investigation into European brandy imports, and in June, it launched a second probe into pork shipments from the 27 EU countries.  

Simultaneously, Brussels has been investigating whether Chinese EV makers benefit from unfair subsidies. 

China’s Global Times newspaper has reported that officials are considering opening an anti-subsidy probe into European dairy imports and imposing tariffs on large-engine petrol cars made in Europe.  

Analysts suggest that China selected brandy and pork to influence France and Spain, key supporters of EU trade curbs, to align with countries like Germany. China reportedly wants the European Commission to halt the tariffs. 

Following the Commission’s confirmation that the provisional tariffs would take effect, the Global Times published an editorial urging Brussels to consider the opposition from European automakers and to engage sincerely in negotiations to find a settlement.  

The newspaper also highlighted US EV maker Tesla’s manufacturing plant in Shanghai, broadening its call for opposition against the tariffs. 

China has accused the European Commission of using its anti-dumping probe to spy on Chinese companies’ supply chains.  

Beijing asserts that the efficiency of these supply chains gives China an advantage in producing low-cost electric cars, among other products.