On Tuesday, the Chinese government accepted the European agreement to increase tariffs on the import of Chinese electric cars into the EU. The country’s trade ministry announced it would impose “temporary anti-dumping duties” on brandy spirits imported from the European Union starting October 11.

The decision comes just days after EU member states agreed to impose tariffs on Chinese electric car imports into the Union. These can increase from the current 10 percent to up to 45 percent over the next five years. The European Commission will decide on their final introduction.

An investigation into dumped European brandy prices has shown that imports from the EU are “significantly threatening” the domestic wine sector, according to the Chinese ministry. From Friday, importers must therefore post a security deposit in the range of 30.6 to 39 percent when importing wine spirits.

A 34.8 percent tax will be imposed on brandy from companies that cooperated with Chinese authorities in the investigation. The highest taxes – 39 percent -⁠⁠ relate to the Hennessy and Remy Martin brands, among others, while the lowest rate of 30.6 percent falls on Martel products. This graduated penalty is the same as the penalty that applies to European tariffs on electric cars.

Those who did not cooperate with the EU investigation will face an additional obligation of 21%, and those who were not subject to an additional obligation of 38.1%. In addition, this duty is added to the existing 10 percent, so in total, Chinese manufacturers can up to about 50 percent of the customs value of to pay the car to the EU coffers. SAIC, the largest Chinese car manufacturer and owner of the MG Motor brand, was burdened with the maximum.

China’s move toward the luxury brew will particularly affect France, which has backed tariffs on Chinese electric cars. According to Reuters, the majority of brandy imported into the Chinese market comes from this country. Last year, almost 40 billion crowns of various types of wine spirits were sent there from France.

Czech distillers will not be affected by the duties, as brandy production is a marginal issue among domestic distilleries. A reduction in exports to China could make brandy, cognac and other wine spirits cheaper on the Czech market, Vladimír Darebník, head of the Union of Producers and Importers of Spirits, told SZ Byznys.

“The European Union is still communicating strongly with the Chinese side, but if it is not possible to reach an agreement and cancel the tariffs, I think there could be a slight reduction in the price of brands that have been introduced on the Czech market. However, it will not particularly affect Czech manufacturers and exporters,” says Darebník.

The European Commission has announced that it will challenge Chinese tariffs on brandy imports from the European Union at the World Trade Organization.

But China’s Ministry of Commerce has also announced that it is considering increasing tariffs on imports of large motor vehicles from the EU. This would have the biggest impact on German car manufacturers, who last year exported vehicles with an engine size of more than 2.5 liters to China for around 27.6 billion kroner. This step could also affect the Czech suppliers of the German car industry.

“The European car industry does not have the best results, and this could be a factor that leads to further weakening,” said Cyrrus investment company portfolio manager Tomáš Pfeiler.

Due to the impact of the tariff war on its manufacturers, Germany opposed an increase in tariffs on Chinese electric cars, but the other member states overrode the opposition. against the taxes. The Czech Republic did not stop voting on taxes.

“The Czech Republic has long supported the free market, but in this case it is disturbed by Chinese subsidies, to which other countries, such as the USA, responded,” said Miluše Trefancová from press department of the Ministry of Industry and Trade.

Spain, which is one of Europe’s main pork exporters to China, also stopped. At the same time, it continues to investigate the dumping prices of pork meat from the EU and does not rule out imposing duties on them as well.

Tariffs on European pork would not directly affect the Czech Republic. Domestic consumption covers only about 40 percent of domestic consumption, so not much pork is exported from the Czech Republic. “However, with a reduction in the sale of European pork in China there would be a surplus on the European market, which could affect the development of the prices of this product,” says Barbora Pánková, spokeswoman for the Chamber Agrarian.

“Given the interconnectedness of the European market, it would also have an impact on domestic breeders, who are therefore following developments in China’s trade policy,” he said.

According to Tomáš Pfeiler, so far the trade disputes between the EU and China are about “controlled escalation”. “It’s not a full-blown trade war yet, especially China is moving fast and picking specific products. But it is obvious that protectionism in foreign trade is getting stronger,” he said.