Introduction
China is extending its anti-dumping investigation into European Union brandy by three months, allowing EU exporters, primarily French cognac suppliers, more time to address potential penalties.
Context
The investigation, which began in January 2024 during rising trade tensions between China and the EU, was initially set to conclude in one year but has now been pushed back to April 5, 2025. The extension to July 5 follows a visit by French Foreign Minister Jean-Noel Barrot, during which China expressed a willingness for greater bilateral cooperation amid threats from U.S. President Donald Trump regarding trade.
Developments
The commerce ministry cited the complexity of the case as the reason for the extension but provided no further details. The Bureau National Interprofessionnel du Cognac, representing the French cognac industry, called the extension a "positive signal" and emphasized the need for negotiation in the upcoming months.
- Shipments of cognac to China have drastically decreased since the implementation of temporary tariffs in October.
- A 72% decline was reported in February.
- The situation comes as Trump is expected to announce new tariffs on countries trading with the United States.
- Currently, Chinese importers are required to pay security deposits of nearly 40% to import brandy from the EU, increasing upfront costs.
Conclusion
The extension of the anti-dumping investigation presents a significant development in the trade relationship between China and the EU, especially for the French cognac industry. As negotiations progress, it will be essential for exporters to adapt to the changing market conditions.