Stalemate in the Matter of Cognac Trade Disputes Between France and China
Escalating Tussle Over Cognac: France and China Remain at Odds Regarding Brand Protection and Traditional Production Methods - Escalating confrontation persists over the cognac disagreement between France and China
Things aren't looking great for the Cognac industry in France, whose yearly exports to China amount to a whopping 1.4 billion euros, as state by Minister Lombard. Starting November, Chinese importers have been required to provide bank guarantees equivalent to the proposed 35.5% tariff hike for European spirit imports. In early April, the Chinese government announced an extension of their anti-dumping investigation into EU Cognac imports until July 5th.
With 98% of their revenue coming from exports, French Cognac manufacturers are heavily reliant on international markets. The US leads the charge with a 38% share, followed closely by China's 25%.
- China's Taxing Situation
- France's Finicky Furor
- Stuck in a Dispute
- Eric Lombard's Fiscal Fight
- EU's European Wine Exports
- Paris and Policies
Behind the Scenes
Despite recent discussions between French Finance Minister Eric Lombard and Chinese Vice Premier He Lifeng, a resolution to the ongoing dispute remains elusive[1][2][4]. While the door for further negotiations has been left ajar, it's the proverbial cat-and-mouse game as both nations continue to play hardball on the matter.
A Bitter Pill for French Producers
The ongoing tussle has taken an enormous toll on French Cognac producers, with China's anti-dumping investigation resulting in provisional dumping measures on EU-origin brandy since October 2023[1][2]. This has left importers footing a security deposit upon arrival, with the potential for severe consequences to the industry and region if a resolution isn't reached[2].
A Waiting Game
Despite the extension of the investigation, the deadline for the imposition of definitive tariffs on July 5th adds pressure on both parties to arrive at a decision[2]. France is keen to revert to pre-2024 conditions, while China continues to uphold its legal investigation framework. The uncertainty in the industry is growing as both parties dig their heels in[1][3][5].
- The European Commission and the European Parliament are closely monitoring the ongoing dispute between China and France over Cognac trade, with the former expressing concern over potential impacts on the EU's industry, finance, and politics.
- The stalemate in the matter has left French Cognac producers in a precarious situation, heavily reliant on exports to China and facing potential tariff hikes that could lead to financial losses in the business and general-news sectors.
- As the deadline for imposition of definitive tariffs approaches, both China and France remain firmly entrenched in their positions, making a resolution in the near future uncertain, sparking unease in the European Parliament and the Council.
