Beijing Holds Back on Brandy Tariffs Amid EU Trade Negotiations

China has decided not to impose provisional tariffs on European Union brandy, despite allegations of it being sold below market prices. This move comes amid ongoing trade talks and could be seen as a negotiation strategy linked to EU tariffs on Chinese electric vehicles. The European Commission is closely monitoring the situation.

China announced on Thursday that it would not impose provisional tariffs on brandy imported from the European Union, despite finding that it had been sold in the country below market prices. This decision offers a temporary respite in tense trade negotiations between the two economic giants.

The Chinese commerce ministry stated that European distillers had been selling brandy in China at a margin of 30.6% to 39%, damaging the domestic industry. However, the decision leaves open the possibility of future tariffs.

This move comes as China lobbies the EU to reject additional duties on Chinese-made electric vehicles. Analysts suggest this could be a negotiation tactic. The European Commission expressed its caution, noting that it will ensure WTO rules are followed and defend EU exporters if necessary.

France, a major exporter of brandy to China, is seen as a key target in this probe due to its support for tariffs on Chinese EVs. French spirits makers' shares rose following the announcement, though the market later adjusted.

The ongoing investigations into EU brandy, dairy, and pork products highlight the complexity of the broader trade row. China launched a dairy probe soon after the EU's revised tariff plan for Chinese EVs was published. This trade tension underscores the intricate economic ties between China and the EU.

(With inputs from agencies.)