Trade tensions between China and the European Union may soon spill over into the wine industry, with the possibility of retaliatory tariffs on European wine imports. This threat has emerged as the EU conducts multiple investigations into alleged Chinese state subsidies in various sectors.
Chinese officials have hinted that EU wines, along with other goods, could face punitive import tariffs depending on the outcomes of these European Commission probes. A legal expert, speaking on a Chinese social media platform closely linked to state media, identified wine and dairy as potential targets, according to Bloomberg.
This warning was echoed by the China Chamber of Commerce to the EU, which posted on X (formerly Twitter) that China has “sufficient countermeasures at its disposal” should the EU proceed with its actions. This statement was made on May 18, indicating a deepening strain in trade relations between China and the EU. The tensions are further heightened by an ongoing EU investigation into potential Chinese state subsidies in the electric vehicle sector.
In a related move, China announced earlier this year an anti-dumping investigation into brandy imports from the EU. This comes at a time when Cognac producers, who count China as a key market, may face additional scrutiny. The topic likely came up during Chinese President Xi Jinping’s visit to France in early May, where he met with French President Emmanuel Macron. During a state dinner in Xi’s honor at the Elysée Palace, prominent French wines and Cognacs were served, underscoring the significance of this sector in Sino-French relations.
China is a crucial market for French wine and spirits, ranking as the third-largest by value in 2023, following the US and UK. However, exports to China decreased by 6.2% compared to the previous year, amounting to nearly €1.2 billion.
Wine has often been a target in trade disputes. Just months ago, China lifted additional tariffs on Australian bottled wines, which had reached over 200% in some cases, effectively barring Australian wineries from the Chinese market. Similarly, in a long-standing trade conflict over subsidies to the European aerospace group Airbus, the US imposed higher tariffs on some European wines.
Wine industry groups have consistently argued against using wine producers and consumers as leverage in trade disputes. The European wine industry group CEEV recently released a manifesto highlighting geopolitical conflicts as a significant source of uncertainty in the global wine trade. The manifesto also noted that EU wine exports reached €17.9 billion globally in 2022-2023, a significant increase from €3.9 billion in 2004-2005.
As tensions between China and the EU escalate, the wine industry remains on alert, bracing for potential fallout from these broader geopolitical disputes.
