French President Emmanuel Macron and Chinese President Xi Jinping have agreed to expedite efforts to resolve the ongoing dispute over Chinese tariffs on French cognac exports. The agreement on the Cognac tariffs emerged from a recent phone call between the two leaders, during which they discussed the importance of fair trade practices and the need to “safeguard international trade rules.”
The dispute began earlier this year when China launched an anti-dumping investigation into European brandy imports, widely seen as a response to the European Union’s (EU) decision to impose tariffs on Chinese electric vehicles. In April, China extended the investigation, allowing EU exporters more time to address potential penalties.
France’s cognac industry, which relies heavily on exports, has been significantly impacted by the tariffs. The Bureau National Interprofessionnel du Cognac (BNIC) reported losses of €50 million per month since the imposition of the duties. “We have an industry that functions very well, that supports more than 70,000 jobs and today it is weighed down by European political decisions,” said Florent Morillon of the BNIC.
During their conversation, Macron emphasized the importance of equitable conditions for businesses in both countries, stating that “Chinese investment is welcome in France. But our companies must enjoy fair competition in both countries.” Xi echoed the sentiment, highlighting the need for China and France to “safeguard international trade rules,” the global economic order, and practice “genuine multilateralism.”
The cognac industry remains hopeful that the dialogue between Macron and Xi will lead to a resolution that alleviates the financial strain on producers and preserves the strong trade relationship between France and China.
French industries have also been rocked by the threat of increased tariffs from US President Donald Trump, as have many other EU nations. As the two sides continue to negotiate a way out of a looming 50% tariff increase not set to take effect on July 9, many other nations may likely turn to China to improve and increase trade ties as an alternative market to the US.
