French Foreign Minister Jean-Noël Barrot said on Friday, March 28, that China had agreed to postpone the possible permanent application of additional customs duties on French cognacs for three months. "It's a first step towards settling this dispute," Barrot said on a visit to China. "Before I arrived in Beijing, the industry was under a definitive application of the law following an [anti-dumping] investigation, the basis of which we dispute," he said. "At the end of this visit, I can confirm that I was told at a very high level that this scenario would not happen, that the conclusions of this investigation would be postponed for three months."
Since October, European exports of brandy to China have been hit with duties after the EU imposed tariffs of up to 35.3% on Chinese electric vehicles over claims of unfair competition. The measure has been painful for French cognac makers, who rely on exports for 98% of their sales. Cognac makes up the vast majority of EU brandy exports to China. The French cognac industry said, in February, that it was losing €50 million ($54 million) per month since the imposition of anti-dumping duties by China, and appealed for government help.
When asked what could happen at the end of the three-month reprieve, the minister admitted that the outcome was still uncertain. "This is a first step that will have to be followed by others so that we can put this dispute behind us once and for all," Barrot said, adding that after three months, the investigation would be closed. "The Chinese authorities will make decisions based on the results of the investigation," he said. "And we will obviously continue to mobilize in Paris and Beijing thanks to the work of our ambassador and all the stakeholders."