Remy Cointreau and Pernod Ricard shares up on China's tariff decision

Investing.com -- Shares in French spirit makers Remy Cointreau (EPA:RCOP ) and Pernod Ricard (EPA:PERP ) jumped following China’s announcement that it would refrain from imposing tariffs on brandy imported from the European Union.

Shares of Remy Cointreau and Pernod Ricard initially surged around 8% on the news, but later pared back some of those gains.

This comes despite an earlier anti-dumping investigation which revealed that European distillers were selling brandy at margins ranging from 30.6% to 39.0%, harming China’s domestic industry.

The Chinese Commerce Ministry's decision to forego additional tariffs offers a boost to the European brandy sector, which was bracing for potential economic setbacks from increased trade barriers. 

This is seen as a strategic gesture in the broader context of strained trade relations between China and the EU.

China has been actively engaging with EU member states to influence the upcoming October vote on additional duties for Chinese-made electric vehicles (EVs). 

The decision not to levy tariffs on brandy may be interpreted as a concession to ease trade tensions and bolster its position against proposed tariffs on its EV exports.

Beyond the brandy tariff decision, China has recently launched additional investigations into EU dairy and pork products, including an anti-subsidy probe into the dairy sector initiated just a day after Brussels revealed its revised tariff plan for Chinese EVs. 

This broader scrutiny of European exports flags the ongoing complexities in EU-China trade relations.

The stability afforded by the absence of new tariffs on brandy offers a temporary reprieve for European distillers and could serve as a crucial factor in the ongoing negotiations between the two economic powerhouses.

Source: Investing.com