I don't know if the EU can withstand China's countermeasures. After the EU announced that it would impose tariffs on Chinese electric vehicles, the mainland immediately announced that there was dumping of brandy originating in the EU, and that when EU brandy entered China, it would have to provide a corresponding deposit to Chinese customs.
In this matter, France is the most affected, because 99.8% of European brandy exports to China come from France, and last year France's brandy exports to China reached 1.7 billion US dollars, accounting for 99% of China's spirits imports.
And the French people have long realized that China may want to make a move on brandy, because France insists on imposing tariffs on Chinese electric vehicles, is one of the countries that voted in favor, and France is also the main supporter of the European Union's investigation of state subsidies for Chinese electric vehicles. At that time, France brandy practitioners held signs demanding that the EU vote on tariffs on Chinese electric vehicles be postponed for the first time since 1998, but France did not listen and insisted on doing so.
How much does this affect France? Let's just say that the France cognac industry, with more than 4,400 farms and 85,000 jobs, is 60% dependent on exports. China is the second largest export market for the France cognac industry, after United States, with 61.5 million bottles sold in 2023, and China is also the most profitable region in the brandy industry.
However, the United States sanctioned France's brandy in 2021, and young people in United States have abandoned brandy, but the Chinese market is increasing. And now, China has also imposed tariffs on EU brandy, and the EU, especially France's brandy industry, will be devastated. In particular, this measure may change the Chinese liquor market, whisky will accelerate the replacement of brandy, and when the EU wants to turn back, brandy may not have a market in China.
However, there is dumping of brandy in the EU, France is the most injured, and other countries that voted in favor are safe?
Of course not, there are dairy products and pork, and in June this year, the mainland also launched an anti-dumping investigation into pork and pig by-products from the European Union.
Pork mainly affected Denmark and Netherlands, which voted in favor, and Spain, which abstained. Unlike brandy, EU pork is mainly sold to China, and there is almost no alternative market for their products other than China, which means that if China does not buy it, no one else can take over.
In August, the mainland announced an investigation into some EU dairy subsidies, mainly affecting Netherlands, France and Ireland. The EU's dairy products are also not good, in the past they still have the market of Russia, after the outbreak of the Russian-Ukrainian conflict, they have lost the Russia market, can no longer lose the big market of China. If the mainland proves that EU dairy products are dumped, tariffs will be increased, and dairy products from United States, Australia and New Zealand will wait for an opportunity to replace EU products.
So when the EU said that it would increase tariffs on Chinese electric vehicles, the EU's brandy, dairy and pork-related practitioners all came out to protest and called on the EU to compensate for the losses.
However, the mainland is not like the EU, in order to prevent Chinese electric vehicles from entering the EU market, and launched unfair sanctions against mainland electric vehicles, and the mainland launched an anti-dumping investigation on the EU's brandy, dairy products and pork, which is based on facts. One of the major items in the EU budget is the common agricultural budget, about one-third of the budget is spent on supporting the agricultural sector, and Europe accuses the continent of spending billions of dollars to subsidize electric vehicles, and we can also say that Europe spends billions of dollars every year to support local companies.
What's more, China's electric vehicles are not subsidized, but rolled up by the Chinese market and supply chain, while the EU's agricultural products are subsidized.
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