China hits back at EU with brandy tax

[Pelican Press 0]

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China hits back at EU with brandy tax

China has imposed duties on imports of ********* brandy in a move that France has said is retaliation for recent big tariffs the EU announced on ******** electric vehicles.

The ********* Commission said it would challenge China’s tax at the World Trade Organization (WTO), calling it an “******” of trade defence measures.

French brandy producers said the duties would be “catastrophic” for the industry.

The ******** move will hit big brands including Hennessy and Remy Martin.

Shares in brandy companies dropped after the announcement.

China announced new restrictions on ********* brandy just days after EU countries approved

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China’s commerce ministry said the brandy imports threaten “substantial damage” to its own producers.

It also said it was considering a hike in tariffs on imports of large-engine vehicles, which would hit ******* producers hardest, and pork and dairy products.

French Trade Minister Sophie Primas said the brandy move “seems to be a retaliatory measure” after the ********* Union decision to raise tariffs on ******** electric cars.

She said that kind of retaliation would be “unacceptable”, and a “total contradiction” of international trade rules, adding that France would work with the ********* Union to take action at the WTO.

France accounts for 99% of brandy exported to China, and French cognac lobby group BNIC said the move would be “catastrophic” for the industry.

“The French authorities cannot abandon us and leave us alone to deal with ******** retaliation that has nothing to do with us,” BNIC said, adding that the taxes “must be suspended before it’s too late”.

Shares in companies that sell spirits took a battering after the ******** announcement.

Luxury firm LVMH, which produces Hennessy, fell more than 3%, while Remy Cointreau, which makes Remy Martin, fell more than 8%.

Analysts at Jefferies estimate that the tariffs could translate into a 20% price increase for consumers, which would probably lead to volumes and supplier sales falling by a fifth.

Shares in ******* carmakers, which could also be hit by retaliatory moves from China, also slid.

Volkswagen, Porsche, Mercedes-Benz and BMW were all down after the announcement.

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