Chinese retaliation to EV duties: “anti-dumping measures” on EU brandy ready

Brussels – China and the European Union are on a path that leads straight to a dangerous trade war. After European duties on imports of electric vehicles, the Asian giant announces its first retaliation: from Friday, Nov. 15, Beijing will impose “temporary anti-dumping measures” on brandy imported from EU countries, despite “progress” announced by both sides over the weekend on negotiations to remove duties on battery-powered cars.

Beijing threatened to tax the distillate a month ago, trying to dissuade EU governments from imposing duties and sit at the negotiating table with Brussels from a position of less weakness. In a note, China’s Ministry of Commerce explained that “the authorities have decided to implement temporary anti-dumping measures in the form of cash deposit or letter of guarantee” against European brandies. A decision taken in response to the risk of “substantial damage to the domestic industry.” 

Brussels will likely challenge the move at the World Trade Organization (WTO), as did China on Oct. 30, the day after the regulation’s publication in the EU Official Journal, against duties on e-cars.  Last month, the European Commission said it was ready to “carefully consider all possibilities to offer appropriate support to producers” who have been affected by what is defined as an “unjustified decision.” 

Suffering the most from the reciprocal protectionist measures will be the French cognac industry, among the leading exporters of brandy to the EU, whose primary representatives already feel that they have been “sacrificed” by the government in favor of the automotive industry. 

Like in war, diplomatic talks run in parallel to hostilities. So, while Brussels and Beijing announced tariffs and mutual appeals to the WTO, from November 2-7, a group of officials from the European Commission’s DG Trade traveled to the Chinese capital for a week of consultations with the People’s Republic’s Ministry of Trade. At the end of five rounds of talks on the possibility of reaching an agreement on electric cars, both sides spoke of “some progress.” For the EU executive, the discussions were “constructive and thorough” to “establish a minimum import price for such a complex product and on the means to monitor and enforce the commitment.” According to Brussels and Beijing, discussions will continue this week.