Beijing’s action came days after European nations moved toward tariffs on electric vehicles from China, and it included a threat to also hit pork and car imports.
Raising the stakes in a trade dispute with the European Union, the Chinese government said on Tuesday it would impose temporary penalties on brandy from Europe and was mulling broader tariffs on European goods.
China’s Ministry of Commerce issued the brandy measures after member countries of the European Union voted last Friday to proceed with anti-subsidy tariffs on electric cars from China. The ministry said that brandy importers would temporarily be required to post deposits of up to 39 percent on the wholesale value of shipments to China.
The deposits would then be forfeited and become tariffs if China eventually makes the measures permanent. The ministry accused European brandy producers of hurting Chinese producers by dumping brandy at unfairly low prices in the Chinese market.
The action produced an immediate slump in the stocks of big European brandy makers like LVMH, the corporate parent of Moët Hennessy, whose shares fell nearly 4 percent.
European officials have dismissed the dumping accusation as unfounded, pointing out that brandy is often much more expensive in China than in Europe. Spirits Europe, a European trade association, strongly criticized the Chinese action on Tuesday as a “significant additional financial burden,” while calling for negotiations between Brussels and Beijing.
The Ministry of Commerce also said that it was mulling whether to impose tariffs on European pork and dairy products, as well as gasoline-powered cars with large engines. Such taxes could hurt big pork exporters like Spain and the Netherlands as well as Ireland, a leading dairy exporter. The car tariffs could hit Germany, which was outvoted last Friday when it opposed the European Union’s electric car tariffs.
The rules of the World Trade Organization, which includes both China and the European Union, forbid trade retaliation without first obtaining the organization's permission. The Ministry of Commerce avoided linking its action on brandy to the European Union’s move on electric cars.
But France had led the push over the past year for the electric car tariffs, and almost all of the brandy imports penalized by China on Tuesday come from France. The Chinese ministry announced its brandy action within hours of reopening after a weeklong national holiday. It also chose deposit percentages that nearly matched the tariff percentages that the European Union plans to impose on Chinese electric cars.
Trade tensions have been building rapidly between Europe and China this year. European nations have objected to China’s tilt toward Russia during the war in Ukraine and have expressed concern about their wide trade deficits with China.
The Ministry of Commerce said separately on Tuesday that it had asked the W.T.O. to review Turkey’s recent imposition of 40 percent tariffs on electric cars from China. Turkey has begun moving to exempt electric vehicle imports by companies that set up factories in the country — something that BYD, China’s largest maker of electric cars, has pledged to do.
Keith Bradsher is the Beijing bureau chief for The Times. He previously served as bureau chief in Shanghai, Hong Kong and Detroit and as a Washington correspondent. He has lived and reported in mainland China through the pandemic. More about Keith Bradsher
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