China says its anti-dumping penalties against brandy imported from the EU are legitimate trade remedy measures.
Hennesy and other brands, mostly from France, will face extra import tax from Friday.
The EU says it will challenge the measures at the World Trade Organisation.
Hennesy and other brands, mostly from France, will face extra import tax from Friday.
The EU says it will challenge the measures at the World Trade Organisation.
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NewsTranscript
00:00The French, or the brandy tariffs, they do predominantly impact France.
00:0499% of the brandy coming from the EU into China comes from there.
00:08That's an industry that was worth $1.8 or so billion last year.
00:13When you're looking at cars and car parts coming from here in Germany to China,
00:19that's just over $29 billion.
00:22So it's an awful lot of money and it is being received, the news anyway,
00:27not too positively here in Europe's largest car manufacturing country.
00:35Those criteria, large-engined, combustion-engined vehicles,
00:39well, that is essentially what German manufacturers export to China,
00:43mostly at the higher end of what they offer.
00:48Manufacturers like BMW, Volkswagen, Mercedes and Porsche
00:53would all be hit particularly hard by that.
00:56All of those brands factor in a large portion of their profit for the year
01:01to come from sales to China.
01:03I mentioned the overall sale was just over $29 billion.
01:07Some of those companies set aside around 40% of their business every year
01:13to do trade with China.
01:14So they're extremely worried about what they're seeing
01:17and the market's equally worried and that's being reflected today.
01:20What we've seen is the BMW share price drop by around 3%
01:25and the Mercedes share price as well down by around 2%.