Cognac braces itself as Europe taxes Chinese electric cars

n June 12, the European Commission announced the provisional findings of its enquiry into electric vehicles produced in China: they “benefit from unfair subsidisation, which is causing a threat of economic injury to EU BEV producers”. It announced “The individual duties the Commission would apply to the three sampled Chinese producers would be:  BYD: 17.4%; Geely: 20%; and SAIC: 38.1%”, and 38.1% for other manufacturers, except for those who cooperated and would be taxed at 21%.

Wine and spirits are clearly targeted by retaliatory measures announced by China, but the Cognac industry is particularly concerned as it has been the target of an antidumping enquiry since the start of the year. “We take note of Europe’s decision and are once again reiterating our serious concern regarding the consequences of the antidumping enquiry launched by China on European brandies”, was the reaction by Florent Morillon, the chairman of the national Cognac trade bureau BNIC. Although China’s Premier Xi Jinping mentioned the issue with France’s President Macron during his State visit to France on May 6, his only commitment was to say there would be no provisional antidumping duties. The enquiry procedure therefore remains ongoing and with it the risk of customs duties being suddenly imposed in a destination that accounts for a colossal 25% of Cognac exports.