Antidumping Probe : China's Crackdown On European Cognac

Global trade is going through a period marked by increasing tensions, where diplomacy and economics intertwine in strategic rivalries. Indeed, China’s opening of an anti-dumping investigation into European cognac imports highlights a new front in the trade conflict with the European Union. This move, perceived as a direct response to European accusations against Chinese subsidies for electric vehicles, reflects an escalation of economic retaliation between two major powers. Such a case goes beyond a mere commercial dispute. It raises fundamental questions about the balance of international trade and the role of institutions like the World Trade Organization in arbitrating these disputes in an increasingly complex rivalry context.

A Prolonged Investigation and Controversial Measures

The situation took a decisive turn last January when China announced the opening of an anti-dumping investigation into European brandy and cognac imports. This action followed accusations from the European Commission, which denounced the subsidies granted by Beijing to Chinese manufacturers of electric vehicles as unfair, distorting competition. In response, China seems to have retaliated by targeting one of Europe’s flagship exports: cognac.

On Wednesday, December 25, the Chinese Ministry of Commerce announced an extension of this investigation until April 5. This decision, according to Beijing, is explained by “the complexity of this case.” At the same time, China has already implemented “temporary anti-dumping measures.” Thus, in November, the Chinese authorities had imposed on European importers the requirement to deposit a customs bond. This initiative, widely perceived as a response to European tariffs on Chinese electric vehicles, has raised concerns in Brussels.

Cognac, which alone represents 95 % of brandy exports from Europe, is directly at the center of this battle. This flagship product of the French industry, supported by giants like Hennessy, Martell, and Rémy Martin, thus becomes a symbol of the escalating tensions between two major economic blocs.

The French Luxury Sector and the Future of Bilateral Trade

Beyond anti-dumping measures, tensions between China and the European Union are likely to sustainably undermine key industries, particularly that of French luxury. Among them, cognac, a true flagship of French exports, plays a central role. This iconic product generates several billion euros each year, and its dependence on the Chinese market heightens the concerns of stakeholders in this sector. The extension of the Chinese investigation and the prospect of further sanctions create a climate of uncertainty that weighs heavily on the economic outlook of major houses like Hennessy, Martell, and Rémy Martin.

In response to this situation, the European Union has opted for a diplomatic standoff. Brussels has engaged the World Trade Organization (WTO) and denounces what it describes as “unfair” trade practices from Beijing. This action reflects a clear intention not to yield to Chinese pressures. However, some observers fear that these retaliations could extend beyond the cognac sector alone. Other strategic industries, such as the entire luxury market, could, in turn, be targeted, thereby increasing tensions. This trade dispute illustrates a broader upheaval in the global economic balance, where each tariff or regulatory conflict becomes a tool of political and economic pressure.

The dispute over European cognac illustrates how trade relations are increasingly intertwined with geopolitical issues in a multipolar world. As tensions between China and the European Union intensify, this case raises questions about the ability of major powers to maintain balanced trade. The coming months will be decisive for the future of the cognac sector, as well as for the stability of Sino-European trade relations.