China, EU trade tension may lead to wine tariffs

wine bottles

Officials in China have hinted that EU wines and other goods could be hit with punitive import tariffs, pending the result of several European Commission investigations into possible Chinese state subsidies in other business sectors.

A warning on a Chinese social media account with close links to state media included a legal expert naming wine and dairy as two agricultural sectors that could be targeted, according to Bloomberg.

This warning was also reported by the China Chamber of Commerce to the EU on X, formerly Twitter. 

In a press statement on 18 May, the Chamber said it had been informed that China has ’sufficient countermeasures at its disposal’, should the EU continue with its actions. 

It’s a sign of strained trade relations between the two sides, and comes as the EU is expected to conclude an investigation into possible Chinese state subsidies for the electric vehicle sector.

Earlier this year, China announced a formal anti-dumping probe into brandy imported from the EU. 

Top Cognac and Lafite uncorked for Xi Jinping in France

Cognac producers count China as a major market and the probe may have been discussed when Chinese president Xi Jinping visited French counterpart Emmanuel Macron in early May. 

Macron held a state dinner at the Elysée Palace in Xi’s honour.

Drinks served included Hennessy XO and Martell Cordon Bleu XO Cognacs, as well as Château Lafite Rothschild 2007 and Maison Edouard Delaunay’s Corton-Charlemagne Grand Cru 2020, said the Vitisphere publication.

China was the third biggest market for French wine and spirits exports by value in 2023, behind the US and UK.

French wine and spirits export agency FEVS said shipments to China reached almost €1.2bn last year, albeit down 6.2% versus 2022.

Wine a target in past trade disputes

It’s only a couple of months since China announced it would end additional tariffs on imports of Australian bottled wines.

Tariffs were more than 200% in some cases, and the policy effectively locked Australian wineries out of the Chinese market. 

Before that, some European wines were targeted with higher tariffs by the US, in a long-running tussle over subsidies paid to European aerospace group Airbus.

Wine industry bodies have repeatedly argued that producers and consumers should not be penalised as part of trade disputes in other sectors.

European industry group CEEV released a manifesto for the future of the European wine sector this week. It highlighted geopolitical disputes as a factor contributing to uncertainty in world wine trade. 

It also said EU wine exports hit €17.9bn globally in 2022-2023, up from €3.9bn in 2004-2005. 

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