elpais.com
China Slaps High Tariffs on EU Brandy, Hitting French Producers
China imposed tariffs of up to 34.9% on EU brandy imports starting July 5th, 2025, impacting French producers like Rémy Cointreau, Pernod Ricard, and LVMH, due to alleged dumping and retaliatory measures against EU tariffs on Chinese electric vehicles; the measure caused initial stock drops but a price agreement mitigated losses.
- What is the immediate impact of China's new tariffs on European brandy, and what are the most significant consequences for major producers?
- China imposed tariffs of up to 34.9% on brandy imports from the EU, impacting French brandy producers like Rémy Cointreau, Pernod Ricard, and LVMH, whose stock prices initially fell sharply but recovered after a price agreement. The tariffs, in response to alleged dumping, are a countermeasure to EU tariffs on Chinese electric vehicles.
- What are the long-term implications of this trade dispute for the brandy industry, considering both market trends and broader economic factors?
- Beyond the immediate impact of the Chinese tariffs, the cognac industry faces a weakening US market, with sales down 11.6% year-on-year in May 2025. Major cognac brands experienced significant sales declines, and broader market weakness is visible in the decreased stock values of Diageo and Davide Campari, indicating a potential industry-wide slowdown. The decreasing consumption among young people further exacerbates the situation.
- What are the underlying causes of the conflict leading to these tariffs, and how does it connect to broader trade tensions between China and the EU?
- The Chinese tariffs, effective July 5th, 2025, and lasting five years, target brandy generally but heavily affect French cognac producers. This is significant as China is the second-largest market for French cognac, with annual exports exceeding \$3 billion. The conflict, starting in October 2024, caused a 70% drop in monthly cognac exports to China.
Cognitive Concepts
Framing Bias
The article frames the story primarily through the lens of the negative impact on French cognac producers, emphasizing their stock market losses and immediate reactions to the Chinese tariffs. While this is a significant aspect, the framing could be improved by providing a more balanced perspective that considers the wider implications for the European spirits industry and the potential long-term effects of the situation. The headline (if there was one) would likely reinforce this focus on immediate negative impacts, thereby shaping the reader's understanding.
Language Bias
The language used is generally neutral but leans toward dramatic descriptions when discussing market reactions. Phrases like "inquietud se ha convertido en atisbo de pesadilla" (anxiety turned into a glimpse of a nightmare) and "el miedo se extendió por todo el sector" (fear spread throughout the sector) add emotional weight to the narrative. More neutral alternatives would be: 'concerns escalated,' and 'uncertainty rippled through the industry.' The repeated emphasis on stock market losses also contributes to a somewhat negative tone.
Bias by Omission
The article focuses heavily on the impact of Chinese tariffs on French cognac producers, giving less attention to the broader European brandy market and other potential contributing factors to the industry's downturn. While the decline in US sales is mentioned, a deeper exploration of the reasons behind this decrease, beyond simply stating 'weak consumption trends,' would provide a more complete picture. The article also omits discussion of potential actions European producers might take beyond price adjustments to mitigate the impact of the tariffs or to improve their market position. The article also doesn't discuss the perspectives of Chinese consumers or the rationale behind their reduced cognac consumption.
False Dichotomy
The article presents a somewhat simplified view of the situation by primarily focusing on the conflict between China and the EU, potentially overlooking other factors contributing to the decline in the spirits market, such as changing consumer preferences and broader economic conditions. It also frames the situation as a direct consequence of the tariff dispute, while acknowledging other factors like weakening US sales, without fully exploring the interconnectedness of these different market forces.
Sustainable Development Goals
The imposition of tariffs by China on European brandy imports has significantly impacted the European spirits industry, leading to stock market losses for major companies like Rémy Cointreau, Pernod Ricard, and LVMH. This negatively affects jobs, profits, and economic growth within the industry. The decline in sales in both China and the US further exacerbates the economic downturn. The article highlights significant losses in market value and decreased sales, directly impacting the economic performance and employment within the spirits sector.