### China Retaliates Against European Brandy Amid E.U. Car Tariff Dispute

In response to the European Union's recent move towards imposing tariffs on electric vehicles from China, Beijing has announced temporary penalties on European brandy. This move, unveiled on Tuesday by China's Ministry of Commerce, may later extend to European pork, dairy, and certain gasoline-powered cars.

Following EU member states' vote last Friday to implement anti-subsidy tariffs on Chinese electric cars, the Ministry of Commerce declared that European brandy importers must now place deposits of up to 39% on the wholesale value of their shipments to China. Should these measures become permanent, these deposits will convert into tariffs. The ministry accused European brandy producers of unfair pricing, alleging they've harmed Chinese producers by dumping brandy at low prices.

This announcement led to an immediate decline in the shares of significant European brandy producers, including LVMH, the parent company of Moët Hennessy, whose stock dropped nearly 4%. European stakeholders, including officials and trade bodies like Spirits Europe, have slammed the dumping allegations as baseless and a "significant additional financial burden." They are urging negotiations between Brussels and Beijing to resolve this escalating trade conflict.

The Ministry of Commerce also hinted at possible tariffs on European pork, dairy goods, and large-engine gasoline cars. These measures could adversely impact major exporters like Spain, the Netherlands, and Ireland, with Germany facing potential repercussions despite opposing the EU's car tariffs.

While the World Trade Organization (WTO) mandates that its members, including China and the EU, seek its approval before enacting trade retaliation, the Chinese ministry refrained from explicitly connecting its brandy measures to the EU's electric car tariffs. However, France, which has been at the forefront of advocating for the electric car tariffs, is notably affected by the brandy penalties, as most of the penalized imports originate from France.

In a parallel development, China's Ministry of Commerce has also called upon the WTO to scrutinize Turkey's 40% tariffs on Chinese electric cars. Turkey has indicated plans to exempt electric vehicle imports for companies that establish manufacturing operations within its borders, a move that could benefit BYD, China's top electric car manufacturer.