China threatens to overtax cognac in retaliation for European decisions on Chinese electric vehicles. The Minister for Foreign Trade Sophie Primas, traveling to Shanghai, advocates dialogue and underlines the importance of preserving commercial relations. Worried cognac producers are pressing Paris and Brussels to find a solution to avoid a major impact on their sector.
Opening of negotiations on cognac
The Minister for Foreign Trade, Sophie Primas, affirmed that “ negotiations remain clearly open » with China regarding potential customs surcharges on cognac. Speaking from Shanghai, where she represents France at the China International Import Fair (CIIE), she assured that a negotiated solution remains possible, despite the firmness of her speech with her Chinese counterpart, Wang Wentao. “ We are not in an escalation of a trade war, and therefore we must enter into negotiations “, she declared, recalling that France favors dialogue.
This situation comes against a backdrop of growing trade tensions between China and the European Union. In response to Brussels' recent decision to overtax Chinese electric cars – with an additional tax of 35% aimed at re-establishing competition deemed unfair – Beijing has announced that it is considering similar measures on European brandies, of which cognac constitutes almost the majority. total exports to China.
Cognac, the flagship product of French exports to China, is on the front line of this possible Chinese response. Representing 95% of brandies imported into the country, it could see its access to the Chinese market severely restricted if the surcharges were confirmed. China being the leading export market for cognac, accounting for around 25% of sales, this possibility greatly worries producers.
Towards a solution at the international level?
The cognac inter-profession, through the National Inter-professional Cognac Bureau (BNIC), is already saying “ sacrificed » by the French government in this commercial battle. At the beginning of October, the BNIC expressed its concern about the potential repercussions, calling for concrete actions to “ put an end to this escalation of which we are hostages “. The industry calls on Paris and Brussels to suspend these new customs taxes, described as “ direct threat » for the future of the sector.
For Sophie Primas, a solution could be found at the G20 in Brazil, scheduled for mid-November, where a meeting is planned between the French and Chinese presidents. “ We will have three-way discussions with cognac producers, the French State and the European Union to defend this market », Specified the minister. At the same time, Michel Barnier also planned exchanges between the Prime Ministers of the two countries to promote constructive dialogue.
The Chinese Minister of Commerce, Wang Wentao, for his part called on France to encourage the European Commission to find a compromise on the issue of electric vehicles. According to him, Beijing wishes to achieve “ an acceptable solution » for both parties.
In Europe, the Commission announced its intention to evaluate the possibilities of support for impacted European brandy producers. Furthermore, China has opened anti-dumping investigations on other European products, notably pork and dairy products, thus targeting sensitive sectors for the European economy.
