China’s Cognac Tariffs Headed To WTO

Last month, China levied temporary anti-dumping measures on European brandies, forcing importers to pay up to a 40% deposit to bring their spirits into the country. The move is seen as retaliation for Europe, and particularly France, issuing tariffs on Chinese-made electric vehicles.

The European Commission has now followed through on its pledge to take the matter to the World Trade Organization. China is the second-largest market for Cognac after the United States, with shipments valued at €767 million ($800m) last year, not including Hong Kong and Singapore, which re-export significant amounts into China.

China’s tariffs on Cognac represent a new hurdle for top global brands like Hennessy, Martell, and Rémy Martin, all of which count China as a key market. Hennessy is currently exploring bottling Cognac in China to circumvent the new levies, while Rémy intends to raise prices to mitigate the tariffs.—Daniel Marsteller

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