The town of Cognac in France has found itself caught in the middle of a trade war between China and the European Union. In mid-October, Beijing imposed temporary anti-dumping measures on European brandy imports in response to the EU Commission’s plans to impose heavy tariffs on electric vehicles from China. This move has caused anxiety and frustration among the cognac makers in Cognac, who feel that they are being sacrificed in a dispute that has nothing to do with their industry. The National Interprofessional Cognac Association has called on the French government to find solutions and engage in discussions with China to try to salvage the situation. China is the biggest market in terms of value for French brandy, making the potential impact of these tariffs significant. France, which voted in favor of the tariffs, is expected to be the most affected by this decision.
The implications of these tariffs are significant for the cognac industry, which represents 70,000 jobs in France. In addition to challenges such as bad weather, poor harvests, the economic downturn after the COVID-19 pandemic, and other conflicts around the world, the threat of losing the second-largest market for cognac could have catastrophic consequences for the industry. The chairman of the General Union of Cognac Winegrowers expressed concerns that the tax on Chinese imports could lead to a price increase of almost 50% in the Chinese market, ultimately leading to the demise of the cognac industry in France.
The impact of the dispute extends beyond just the cognac industry, as other European brandies made from grapes, such as armagnac and Italian grappa, will also be subject to the Chinese taxes. This will further strain the European spirits market and potentially have long-term consequences for the industry as a whole. The cognac makers are calling for urgent action from the French government to address the situation and work towards a resolution that will protect their livelihoods and secure the future of the industry.
The tensions between China and the EU have put French brandy producers in a difficult position, as they are caught in the middle of a dispute that was not of their making. The situation highlights the interconnectedness of global trade and the unintended consequences that can arise from trade disputes between major economies. The cognac industry in Cognac, which has a long and storied history, is facing an uncertain future as it grapples with the potential loss of a key market due to geopolitical tensions.
The cognac makers are urging the French government to take immediate action to mitigate the impact of the Chinese tariffs on their industry. They are calling for dialogue with Chinese authorities to try to find a solution that will protect French brandy exports and ensure the sustainability of the industry in the long term. The potential loss of the Chinese market, which accounts for a significant portion of their sales, poses a serious threat to the livelihoods of thousands of people who rely on the cognac industry for their income.
In conclusion, the trade war between China and the EU over electric vehicles has had unintended consequences for the French brandy industry, particularly in Cognac. The threat of Chinese tariffs on European brandy imports has put the livelihoods of tens of thousands of people at risk and could have long-lasting effects on the industry as a whole. The cognac makers are calling for urgent action from the French government to address the situation and protect their industry from the impact of the tariffs. The resolution of this dispute will be crucial in determining the future of the cognac industry in France and the livelihoods of those who depend on it for their income.
