Hundreds of Tractors Descend Upon Streets of France in Protest of Chinese Cognac Trade War

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Last week, hundreds of tractors flooded the streets of France in protest of a looming trade war that has pitted European spirits against Chinese vehicles. A coalition of between 800 to 1,500 union members, winegrowers, distillers and industry figures gathered outside the regional government headquarters in the town of Cognac, famous worldwide for its eponymous brandy. Protestors called upon EU officials to postpone a September 25 vote imposing tariffs on Chinese electric vehicle imports. The long unwinding saga traces back to last year, when the EU announced an investigation into "artificially low" Chinese EV subsidies. In retaliation, China announced an anti-dumping investigation into brandy imports that now threatens to topple the French spirits industry. France reportedly shipped 32 million bottles of cognac to the Chinese market in 2023. The country is the world's second-largest cognac consumer, responsible for over a billion dollars in revenue each year over the past decade. Were tariffs — or a defacto ban — to be imposed on European brandy in China, French distillers fear that losses would be catastrophic. Anthony Brun, the union head for Cognac's brandy makers, wrote an impassioned plea to French Prime Minister Michel Barnier.

"The situation is urgent," Brun wrote, per The Daily Gazette. "For a year now, we have been warning French and European authorities about this risk and the need to stop this downward spiral [...] We are the victims without being in any way responsible... We have not been listened to."

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Clik here to view. Up until recently, it appeared that the trade scuff might be avoided entirely. Chinese President Xi Jinping visited France for a two-day diplomatic trip in May during which he attended meetings with French President Emmanuel Macron, luxury goods billionaire François-Henri Pinault and LVMH CEO Bernard Arnault, owner of Hennessy Cognac and Moët & Chandon Champagne. Negotiations appeared to have gone well at first glance. Macron gifted the Chinese delegation two cognac bottles collectively valued at over $3,000; Jinping gifted France a rare stuffed bird. Afterward, the French President remarked:

“I thank the president for his open attitude regarding provisional measures on Cognac and for his wish not to implement them."

The EU nonetheless appears to be moving forward with its electric vehicle tariff vote. The specifics of that decision — and China's response — will be made clear on Wednesday. [callout-app-promo] Though China has yet to formalize its tariff threat, brandy makers have already been plunged into rough waters. Hennessy owner LVMH recently reported a 12% revenue slump in wine and spirits that executives attributed to "weak local demand in the Chinese market." Spectators believe that the implications go deeper than legislation.

“When China announces an investigation, it is the start of the ban on French Cognac, an effective ban. It signals to society in China that Cognac is no longer in favour,” Ian Ford, chief executive of Shanghai-based alcohol management company Nimbility told the South China Morning Post in January. “Therefore, if you’re at a big banquet, entertaining a government official, it’s taboo now to be drinking or gifting Cognac.”

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