EU‑China trade rift: Brandy caught in electric vehicle spat

Last week, the EU decided to impose tariffs on Chinese electric vehicles, prompting a response from China that doesn't concern cars but instead brandy. The Chinese Ministry of Commerce announced it would impose temporary measures on importing this liquor, a decision that would primarily impact France.

At the beginning of October, European Union member states agreed to introduce tariffs on Chinese electric vehicles. Beijing is the largest producer of electric vehicles globally. The worldwide export of these vehicles from China increased by 70% in 2023, reaching a value of USD 34.1 billion. The EU is the largest recipient of these electric vehicles.

The countries opposing the tariffs were Germany, Hungary, Malta, Slovenia, and Slovakia, while France and Poland supported them, with France actively lobbying for their implementation.

Charlie Zhang, Vice President of Chery Automobile, stated that restricting the import of electric vehicles from China, which he sees as the intent behind possible punitive tariffs, won't immediately enhance the situation for European manufacturers. He emphasized his belief in the strength of collaboration.

Now, China's response has arrived. Starting Friday, October 11th, brandy importers from the EU will have to pay security deposits to the customs authorities.

"The move mainly targets French luxury cognac brands," says Politico. France accounts for 99% of the brandy exports from EU countries. China had threatened to impose tariffs on brandy earlier this year, according to a post by Jakub Jakóbowski, Deputy Director of the Centre for Eastern Studies, on the X platform.

Politico notes that farmers are apprehensive about a similar move by China, mainly concerning two sectors: pork and dairy.

The brandy sector has repeatedly warned against becoming a hostage to geopolitical tensions between Beijing and Brussels.