China and France Engage in Dialogue to Resolve Brandy Tariff Dispute
China and France have reaffirmed their commitment to address trade tensions through continued dialogue, focusing especially on the issue of Chinese tariffs on European brandy. This development follows a week of high-level discussions, offering cautious optimism for a potential resolution to the dispute impacting French cognac exports.
Background of the Tariff Dispute
Earlier this year, China imposed anti-dumping duties of up to 39% on European brandy imports, measures widely interpreted as a counteraction to European Union tariffs on Chinese electric vehicle exports. France, being the world’s leading producer of cognac, has been significantly affected by these tariffs.
- Major French cognac producers such as LVMH’s Hennessy, Pernod Ricard’s Martell, and Rémy Cointreau have experienced a noticeable decline in sales to China, their most valuable export market in revenue terms.
- China’s annual imports of French brandy amounted to approximately $1.7 billion last year, making it the most important market by value and the second largest by volume after the United States.
Recent Developments in Trade Negotiations
Discussions took place on the sidelines of an OECD conference in Paris, involving Chinese Commerce Minister Wang Wentao and French Trade Minister Laurent Saint-Martin. Further technical meetings were held in Beijing, where Chinese officials expressed willingness to settle the matter, although some differences remain unresolved.
The Chinese foreign ministry stated that both nations have reached a consensus on resolving economic and trade issues through constructive dialogue and consultation, signaling a shared intent to find common ground.
Looking Ahead to Resolution
China was initially set to finalize its decision on the duties by January but has extended the deadline twice, now delaying the final ruling to July 5, 2025. This extension provides more time for negotiations and indicates a potential opening for compromise.
French Trade Minister Laurent Saint-Martin emphasized that France will stand firm on protecting its key industries, such as cognac, during these talks.
As China strives to strengthen trade relations with the European Union amid strained ties with the United States, resolving the brandy tariff dispute is critical for both parties to maintain healthy bilateral economic cooperation.
Key Points Summary
- China imposed up to 39% tariffs on European brandy in early 2025.
- French cognac exports to China represent $1.7 billion annually, the largest market by value.
- Recent dialogue between Chinese and French trade ministers shows progress toward resolving the tariff dispute.
- China extended the final decision deadline on duties to July 5, 2025.
- France prioritizes safeguarding its cognac industry throughout negotiations.
