Why France is toasting China’s new tariff on European brandy

China’s new anti-dumping duty targeting European brandy unexpectedly became the toast of France over the weekend, after Beijing granted exemptions to a string of French cognac makers.

The cordial reaction in Paris came as a surprise to many analysts, who had initially predicted that China’s decision to impose the tariff might further raise tensions with the European Union and sour preparations for an upcoming leaders’ summit in Beijing.

But French leaders ended up hailing the ruling as a “positive step”, after a deal was brokered that saw major producers including Hennessy, Martell and Rémy Martin sign on to a minimum export price that exempted them from the levy.

That allowed Chinese foreign minister Wang Yi to wrap up his European tour on a positive note on Sunday, with Beijing having published an official list of 34 companies exempted from the tariff and French industry insiders sharing that the move could have a huge impact.

The exemptions will cover roughly 90 per cent of French cognac exports to China in volume terms, according to France’s Union Générale des Viticulteurs pour l’AOC Cognac (UGVC), a producers’ union with 2,000 members.

French foreign minister Jean-Noël Barrot framed China’s announcement as an “agreement” reached between China and the cognac industry at a joint press conference with Wang on Friday evening, Paris time.