The French Foreign Minister plans to visit China amid trade tensions impacting the cognac industry. Exports to China have fallen by 60%. The cognac sector, heavily reliant on the U.S. and China’s markets, warns of potential job losses if disputes are unresolved. President Trump’s tariff threats could devastate sales.
The French Foreign Minister, Jean-Noel Barrot, is set to visit China on March 27 and 28, following discussions regarding easing trade tensions between the European Union and China, as expressed by Florent Morillon, head of the cognac lobby group BNIC. The cognac industry faces challenges due to ongoing trade conflicts with both China and the United States.
Morillon highlighted a significant downturn in cognac exports to China, which have plummeted by 60% over the last four months, asserting that the industry feels “taken hostage in this trade dispute.” He emphasized the critical contribution of the U.S. and China to French cognac sales, which comprise 70% of total market revenue.
Morillon warned that failure to rectify the ongoing disputes could jeopardize jobs and the local economy, stating, “This means 70% of the jobs and the ecosystem in the region would be annihilated.” China’s temporary anti-dumping measures against EU brandy imports, implemented after the EU voted for tariffs on Chinese electric vehicles, have severely affected cognac sales.
Should negotiations prove ineffective, these measures could transition to permanent status by the following month. Additionally, President Trump has indicated a potential 200% tariff on wine and cognac imports from Europe, a move Morillon described as devastating, suggesting it would eliminate European cognac sales in the U.S. market, which were valued at approximately 1 billion euros in the previous year.
In summary, the French Foreign Minister’s upcoming visit to China is crucial amid escalating trade tensions affecting the cognac industry. The severe decline in cognac exports and the looming threat of increased tariffs necessitate urgent diplomatic efforts to protect this vital sector of the French economy. Both industry leaders and policymakers must prioritize resolving these disputes to ensure the sustainability of jobs and market stability.
Original Source: www.usnews.com
