China reportedly seeks to tie French cognac deal with EV tariff talks

French cognac makers are reported to have reached a tentative deal with China to sort out prices but Beijing is said to want to only finalise that if there is progress made on EU tariffs over Chinese EVs. For some context, China imposed temporary duties on cognac as part of an anti-dumping investigation into European brandy. This was done in retaliation to the EU’s move of imposing added tariffs on imports of Chinese-made EVs.

If no agreement is struck by the 5 July deadline, China could permanently increase customs duties of up to 39% on European cognac imports. It’s a major blow for French cognac makers, which have been suffering already, with China being the world’s most valuable market for the spirit. Here’s an indication of the struggle since last year:

The sources report that there is now a provisional agreement, which will be “much better” than the existing duties. However, they are waiting on the sign off by Chinese authorities who are believed to want to link “finalising the cognac deal to movement on the electric vehicle dossier”.

It’s all a game of tradeoff it would seem now.

This article was written by Justin Low at www.forexlive.com.