Martell, Jas Hennessy and Remy Martin Most Impacted by China's Custom Duties

China has announced that it will impose "temporary anti-dumping measures" on brandy imported from the European Union (EU), escalating a trade conflict between the two major economic powers. This move is part of a broader dispute, as Beijing and Brussels have clashed over Chinese subsidies for domestic industries, which the EU claims distort free competition by allowing Chinese exports to undercut European businesses. Beijing has rejected these accusations, labeling them as protectionist tactics by the EU. A list of affected companies has been released, detailing expected duty rates. The tariffs range from 30.6% for Martell, to 39% for Jas Hennessy, and 38.1% for Remy Martin.

In January, China launched an investigation into EU brandy imports following the EU’s investigation into Chinese electric vehicle (EV) subsidies. While Beijing had initially refrained from imposing tariffs in August despite finding evidence of dumping, it has now opted to enforce measures.

Starting Friday, importers of EU brandy will be required to provide a "corresponding guarantee" to Chinese customs based on customs-approved prices and import taxes. China's commerce ministry stated that the investigation had preliminarily determined that EU brandy imports were being dumped, posing a serious threat to China’s domestic brandy industry. The ministry emphasized a direct link between the dumping practices and the damage to the local industry.

China is a significant market for brandy, importing more of it than any other spirit in 2022, with a majority of the imports coming from France. This marks a significant development in the ongoing tensions between China and the EU, as both sides continue to grapple with trade policies and the impact of subsidies on international competition.