China launches anti-dumping investigation into EU brandy, apparently in response to EU scrutiny of Chinese electric car makers. French companies in particular are likely to be affected.
Amid tense trade relations between Beijing and Brussels, China has launched an anti-dumping investigation into brandy from the EU. Drinks such as brandy that are exported to China in containers with a capacity of less than 200 liters are affected.
A Chinese spirits association submitted the application for review. In foreign trade, dumping means selling a product below the manufacturing price, which violates trade rules.
Brandy investigation as retaliation?
Weinbrand’s investigation follows the EU’s previous anti-subsidy investigation into Chinese electric car manufacturers. When the announcement was made in September, Brussels accused Beijing of flooding the European market with low-cost Chinese electric vehicles.
China reacted angrily. Trade relations between the two partners deteriorated. Observers therefore see the liquor investigation as a retaliatory measure on the part of China.
France particularly affected
French companies, which have an important sales market in China, are likely to be particularly affected by the audit. Because Emmanuel Macron’s French government strongly supported the electric car investigation at the time, some analysts believe the brandy test was no coincidence.
In the past, China had tried to exert pressure by testing imported wines from Australia when relations between Canberra and Beijing were tense. At the time, the world’s second-largest economy imposed anti-dumping tariffs, but they were withdrawn as political relations improved.