New Trade War: After EU Approves Tariffs on Chinese Electric Vehicles, China Imposes Duties on European Cognac

The Chinese government today announced the imposition of temporary duties on European cognacs, ranging from 30.6% to 39%. This comes four days after most European Union countries approved duties on Chinese electric vehicles. So, starting from Friday, Chinese lovers of European alcohol will pay much more, AP reported.

The duties on cognac from Europe are temporary and require importers to post a bond to the Chinese customs service for the amount of the tariff starting this Friday. A preliminary finding by the Chinese Ministry of Commerce at the end of August indicated that European cognac had been dumped in China, which could cause ‘significant damage’ to domestic producers of the drink.

The imposition of duties on European cognac also potentially gives Chinese negotiators leverage in talks with the EU to reduce or eliminate tariffs of up to 35.3% on Chinese electric vehicles, which will come into effect on 31 October.

European Union countries last week voted to impose tariffs on imports of electric vehicles from China, amid ongoing negotiations between Brussels and Beijing to resolve the trade conflict peacefully by the end of October. Electric vehicles have become the main point of confrontation in the trade dispute over the impact of Chinese government subsidies on European markets. This has led to lower EU industrial prices and Beijing's growing exports of green technologies to the bloc.

The European Commission, which manages trade on behalf of the 27 member states, welcomed their majority approval of the plan to introduce the duties, although EU auto industry leaders Germany and Hungary voted against.  The duties will take effect on 31 October unless China finds a solution.