China targets French brandy after EU approves EV tariffs

China will begin imposing tougher restrictions on imports of brandy from the European Union, after Brussels voted to apply additional tariffs to China-based electric vehicles makers.

The new measures from Beijing, which come into effect on October 11, almost exclusively apply to France as it accounts for 99 percent of China's imports of the wine-based spirit.

China's commerce ministry said that an investigation had preliminarily determined that dumping of brandy from the European Union threatens "substantial damage" to its own sector.

French brandy shipments to China reached $1.7 billion last year and France is seen as the primary target of Beijing's brandy inquiry. Paris supports the incoming European Union tariffs on China-made EVs.

The National Interprofessional Bureau of Cognac lamented the news from China, saying:

"This announcement comes at a time when the Chinese authorities had announced that they had no intention of levying provisional duties before the end of the investigation, which shows that their position has hardened.

"Faced with this development, the French authorities cannot abandon us and leave us alone to face Chinese retaliation that does not concern us. As we have been saying for months, the impact of these taxes would be catastrophic for our industries and our regions."

'Naked protectionism' 

China called the European Union's tariffs on Chinese electric vehicles an example of "naked protectionism," while the French president Emmanuel Macron said China's brandy investigation was "pure retaliation."

The EU argues that EV tariffs are needed to preserve a level playing field, but reacted sharply to China's brandy levy. 

"The EU takes with utmost seriousness any unfair use of trade defense instruments against any sector of our economy," a statement read.

"Abuse of trade defense for inappropriate reasons is a clear breach of WTO rules. Accordingly, the Commission will robustly challenge at WTO level the announced imposition of provisional anti-dumping measures by China on imports of brandy from the EU."

Importers of EU brandy will have to put down security deposits mostly ranging from 35 percent to 39 percent of the import value.

And in a further sign of the rising trade tensions between Brussels and Beijing, China's ministry added that an ongoing anti-dumping and anti-subsidy investigation into EU pork products would make "objective and fair" decisions when it concludes.

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