Economy: China Hits Back at EU Tariffs With Explosive Investigation!

Tensions between China and the European Union are escalating with recent trade measures. While Brussels targets Chinese electric vehicles with new tariffs, Beijing is responding by investigating a key sector of European exports.

Anti-dumping Investigation on European Brandy in China

Last Friday, China intensified its anti-dumping investigation on European brandy imports by announcing a public hearing for July 18th. This initiative coincides with the EU’s imposition of provisional tariffs of up to 37.6% on Chinese electric vehicles.

The Chinese measure aims to assess whether European producers, including Martell, Rémy Martin, and Hennessy, are selling their products below market prices — an allegation they will have the chance to contest during this hearing in Beijing. The meeting was requested by European cognac houses such as Martell and Société Jas Hennessy & Co., which are determined to defend their position.

This action comes amid increasingly tense trade relations between Brussels and Beijing. In January, Beijing had already launched a similar investigation into brandy imports, and in June, another into pork shipments from the EU.

China has made it clear that it wants to continue negotiations to avoid a tariff escalation, but it is prepared to take all necessary measures to protect its industries. The four-month period during which tariffs on electric vehicles remain provisional will be crucial, with intensive talks between the two parties expected to continue to try to find common ground.

Consequences and Reactions of Stakeholders

China’s response to the EU’s provisional tariffs on electric vehicles was swift. Beijing immediately intensified its investigation into European brandy imports and launched a new investigation into European pork, affecting exports from France and Spain, two of the staunchest supporters of the EU’s tariff measures.

Additionally, China is considering further investigations into dairy products and internal combustion engine cars from Europe, apparently aiming to pressure countries like Germany, where automakers generate a third of their sales in China. This strategy aims to divide European tariff supporters while demonstrating Beijing’s determination to protect its economic interests.

Meanwhile, the European Union has confirmed that the provisional tariffs of 37.6% on Chinese electric vehicles are now in effect, with a four-month period for manufacturers to comment on these measures. During this time, Chinese companies like SAIC Motors, Geely, and BYD are experiencing initial repercussions, with their shares in Hong Kong already falling.

Analysts estimate that this escalation could severely disrupt the economy and Sino-European trade relations if no solution is found. The situation is further complicated by Beijing accusing Brussels of using anti-dumping investigations to spy on Chinese supply chains, fueling tension and uncertainty for industries on both sides.

As discussions between China and the EU continue, the outcome of this tariff confrontation remains uncertain. The industries concerned are closely monitoring every move, aware that the decisions made could have major repercussions on the economy, trade exchanges, and global economic stability.