China retaliates against EU tariff hike

Beijing will probe brandy imports from the bloc in response to duties on electric vehicles imposed by Brussels 

Beijing has announced the next stage in its investigation into EU brandy imports, in the latest tit-for-tat measure after the bloc imposed provisional duties on Chinese electric vehicles (EVs).  

The EU on Thursday slapped tariffs ranging from 17.4% to 37.6% on Chinese EV imports on top of existing 10% duties, citing Beijing’s “unfair subsidization” of car manufacturers.  

The Chinese Ministry of Commerce responded on Friday by announcing that it will hold a hearing on July 18 to address claims that EU brandy producers are selling their goods in China below market rates.  

The hearing requested by brandy houses Martell, Societe Jas Hennessy & Co., Remy Martin, and others will assess “industrial damage, cause and effect, and public interest in the anti-dumping probe of related brandy products,” according to the ministry’s statement.  

The Chinese probe will look into EU-produced brandy in containers holding less than 200 liters imported between October 2022 and September 2023, the ministry added. It will also investigate the alleged damage inflicted on the Chinese brandy industry between January 2019 and September 2023.  

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The Chinese Chamber of Commerce to the EU condemned the bloc’s tariffs as “politically-motivated” and “protectionist,” expressing hope to resolve the dispute through dialogue.  

Meanwhile, EU countries are split on the move, with Germany, whose automakers made a third of their sales in China last year, fearing the curbs will do more harm than good.   

German car giant Volkswagen reportedly called the move “detrimental,” while the head of BMW said the tariff battle “leads to a dead end”.  

The value of EU imports of Chinese EVs surged to $11.5 billion in 2023, from just $1.6 billion in 2020, accounting for 37% of all EV imports to the bloc, according to recent research.    

Last year, the European Commission launched an investigation into claims that subsidies allowed Chinese EVs to be sold at much lower prices than ones produced in the bloc.  

China has repeatedly urged the EU to cancel its EV tariffs, warning that it would “not sit back and watch” and expressed a willingness to negotiate. In January, Beijing launched a first reciprocal anti-dumping investigation into EU brandy imports and in June started a second probe into pork shipments from the bloc.