France’s Foreign Minister Jean-Noel Barrot plans a two-day visit to China, amidst calls from the cognac lobby BNIC for relief from trade tensions affecting exports. The cognac industry suffers from a 60% decline in sales, straining its survival as it is caught in trade disputes with both China and the U.S. The future of the industry hinges on resolving these issues.
France’s Foreign Minister, Jean-Noel Barrot, is scheduled to visit China on March 27 and 28, according to Florent Morillon, head of the cognac lobby group BNIC. This visit is aimed at addressing the ongoing trade tensions between the European Union and Beijing, which have severely impacted France’s cognac industry. The sector has been caught in disputes involving both China and the United States, leading to significant trade challenges.
Florent Morillon highlighted the plight of the cognac industry, stating, “We are taken hostage in this trade dispute”. Exports of cognac to China have plummeted by 60% within the past four months, illustrating the depth of the crisis. The EU puts heavy reliance on both the U.S. and China for cognac sales, accounting for 70% of total exports; thus, a resolution is crucial for the industry’s survival.
Morillon warned that without intervention, the consequences could be dire, stating, “This means 70% of the jobs and the ecosystem in the region would be annihilated”. This alarming prediction is particularly pressing considering that he also holds a position at Hennessy, the largest cognac producer in France, owned by LVMH
Further complicating matters, China has enforced temporary anti-dumping measures against EU brandy imports following the bloc’s decision to impose tariffs on Chinese electric vehicles, which severely affected cognac sales. BNIC representatives mentioned these measures may become permanent if the disputes remain unresolved.
Adding to the industry’s peril, President Trump recently threatened to impose a staggering 200% tariff on alcohol imports, including cognac. Morillon expressed the catastrophic implications of such tariffs, stating, “200% would mean we won’t sell one single bottle in the United States.” Last year, cognac export revenue to the U.S. reached approximately 1 billion euros, underscoring the high stakes involved in these trade disputes.
In conclusion, the French cognac industry is facing significant challenges due to escalating trade tensions with both China and the United States. With exports severely diminished and potential tariffs looming, the situation calls for urgent diplomatic intervention. Foreign Minister Jean-Noel Barrot’s visit to China aims to mitigate these tensions and safeguard the livelihoods of those dependent on this vital sector.
Original Source: www.usnews.com
