BRUSSELS – French cognac producers warned on Thursday that they could be just days away from becoming innocent victims of the escalating trade conflict between the European Union and China.
“We have the impression that we are held hostage by things that have absolutely nothing to do with us and that we can be eliminated from the landscape with the stroke of a pen,” said Raphaël Delpech, CEO of BNIC.
“It would be an absolute failure of trade policy, both for France and for Europe,” Delpech said in an interview with L’Observatoire de l’Europe.
As the European Commission prepares to impose tariffs on imports of Chinese electric vehicles, BNIC – whose members employ 70,000 people and represent almost 4 billion euros in exports – fears the decision only exacerbates latent trade tensions with Beijing.
In response to a Paris-backed investigation into state subsidies for Chinese electric vehicles, Beijing retaliated in January with its own investigation into European wine-based liqueurs. This decision clearly targeted French luxury cognac brands, which represent 99% of China’s imports of these liqueurs.
During a visit to France earlier this month, Chinese President Xi Jinping vowed not to impose tariffs – at least not until an investigation launched by Beijing is finally over. In declaring victory, his host, President Emmanuel Macron, presented Xi with several bottles of the finest French cognacs as a peace offering.
“Unfortunately, we are not at all reassured by the statements after the meeting between the two presidents. Not at all,” added Delpech.
“We fear that the investigation will now be closed for political reasons, without our demonstration being completed, and that definitive obligations will be applied to us. »
China is the second largest export market for the French cognac industry, after the United States, with 61.5 million bottles sold in 2023, according to BNIC data.
The industry also expressed regret that French authorities did not listen quickly enough when they warned of the risk that Beijing could attack the cognac sector as early as last September – the month in which European Commission President Ursula von der Leyen announced an investigation into public subsidies to the cognac sector. Chinese electric vehicle manufacturers were unfair.
“What we really regret is that when the risk became apparent, the necessary measures were not taken to protect us from it,” Delpech said. “We, the cognac sector, were seen as an adjustment variable, as acceptable collateral damage. »
The European Commission’s trade department is expected to inform carmakers and importers of its decision to impose temporary tariffs on Chinese electric vehicles by early June, days before European Parliament elections. Von der Leyen said during the election campaign that Brussels would introduce “targeted” tariffs on Chinese electric vehicles.