EU Challenges Chinese Brandy Tariffs at WTO

BRUSSELS/BEIJING (Reuters) -The EU Commission said on Monday it had formally brought the provisional anti-dumping measures imposed by China on imports of EU brandy to the World Trade Organization, the latest development amid trade tensions between the two blocs.

France’s trade ministry said last month it would work with the European Commission to challenge Beijing’s tariffs, which came after the European Union voted for duties on Chinese-made electric vehicles.

China’s commerce ministry said it had received an EU consultation request and would handle the matter according to WTO rules.

“The provisional anti-dumping measures were implemented based on Chinese law, at the request of domestic industries, after a fair and impartial investigation, and are legitimate trade remedies fully in line with WTO rules,” the ministry said.

France, whose producers including LVMH , Remy Cointreau and PernodRicard, export huge amounts of spirits to the Asian country, was seen as the main targets of the brandy tariffs following Paris’s outspoken support of the Commission’s efforts to protect the domestic EV market.

French President Emmanuel Macron previously called China’s brandy probe “pure retaliation”.

China is the second-largest export market for cognac after the United States and the industry’s most profitable. French brandy shipments to China reached $1.7 billion last year and made up 99% of China’s imports of the drink.

Meanwhile, Hennessy is exploring options to bottle cognac in China, which prompted hundreds of workers at its plant in southwestern France to go on strike last week, while Remy said it would raise prices in China and could cut costs in areas like manufacturing and ad spending.

(Reporting by Makini Brice, Tassilo Hummel and Ella Cao and Ryan Woo in Beijing; Editing by Bernadette Baum)