China Extends Anti-Dumping Probe into EU Brandy, Delays Potential Sanctions
Beijing has decided to prolong its anti-dumping investigation into European Union (EU) brandy imports by an additional three months, the Chinese Commerce Ministry announced on Wednesday (Apr 2). This extension grants EU exporters, particularly French cognac producers, a critical window to negotiate and potentially sidestep severe trade penalties.
Initiated in January 2024 amid escalating trade frictions between China and the 27-member EU bloc, the inquiry was initially set for completion within a year. However, authorities extended the deadline to April 5, 2025. Now, following diplomatic engagements, the conclusion has been further delayed to July 5, 2025.
The decision follows the recent visit of French Foreign Minister Jean-Noel Barrot to Beijing, where discussions centered on strengthening bilateral trade relations. His trip coincided with escalating tensions in global trade, fueled by U.S. President Donald Trump’s threats of tariffs targeting key trading partners, including China and the EU. At the close of his visit, Barrot confirmed that China had opted for a three-month extension, mitigating the risk of abrupt regulatory measures being enforced on the sector.
Citing the intricate nature of the investigation, China’s Commerce Ministry provided little further detail on the reasoning behind the delay. Nonetheless, the move has been welcomed by industry stakeholders. The Bureau National Interprofessionnel du Cognac, representing French cognac exporters, interpreted the decision as a "positive signal." The organization emphasized the importance of utilizing the extra time for productive negotiations, underscoring the urgency to secure favorable outcomes.
China and the United States remain the most significant markets for the cognac industry. However, since the introduction of temporary tariffs in October, exports to China have suffered a sharp decline. Industry data indicates a staggering 72 percent drop in shipments to the Chinese market in February alone.
In October 2024, Beijing imposed provisional anti-dumping measures on EU brandy, affecting major French labels such as Hennessy and Remy Martin. This move came in response to the EU's imposition of tariffs on Chinese electric vehicles. Under these interim restrictions, Chinese importers must provide security deposits of nearly 40 percent to continue importing brandy from the EU, significantly increasing upfront costs and hampering trade.
The extended investigation period allows for continued dialogue between Chinese authorities and EU trade representatives. The coming months will be crucial in determining whether a long-term resolution can be reached or if more stringent measures will ultimately be imposed on EU brandy imports.