China Halts Brandy Tariffs Amid Trade Tensions with EU

China announced it would not impose tariffs on brandy imported from the EU, despite confirming dumping occurred. The decision eases tensions in trade talks and impacts shares of major European spirit makers. China's move is seen as strategic amidst discussions on tariffs for Chinese electric vehicles.

China announced on Thursday that it would not impose tariffs on brandy imported from the European Union. This decision comes despite a January anti-dumping investigation concluding that dumping had taken place, offering both sides some respite in ongoing trade negotiations.

The Chinese commerce ministry confirmed that European distillers had been selling brandy at a margin between 30.6% to 39.0%, harming local industry. Meanwhile, China has been lobbying the European bloc's 27 member states to reject additional duties up to 36.3% on Chinese-made electric vehicles in a vote scheduled for October. The non-tariff decision could be advantageous for China in this context.

Following the announcement, shares in French spirit companies Remy Cointreau and Pernod Ricard surged by about 8%, and Italy's Campari saw its trade halted after a 4.5% stock increase. Pernod Ricard's CEO, Alexandre Ricard, stated a continued cautious outlook on China, refraining from detailed comments while presenting the company's annual results.

In addition to the brandy case, Beijing has initiated anti-subsidy investigations into EU dairy and pork products. The dairy probe began last week, coinciding with Brussels' revised tariff plans for Chinese electric vehicles.

(With inputs from agencies.)