Shaken by US and Chinese tariffs, the cognac industry questions its future
The countdown has started, with pressure mounting in the Cognac region in southwestern France. China has set a July 5 deadline on making permanent customs duties of between 35% and 39% on imports of the prized eau de vie(brandy) from Charente − duties that have been in place on a provisional basis since October 2024. This marks a major blow for the industry. These duties would come on top of the US tariffs on the French spirit, which have stood at 10% since April – a level that could rise further if trade negotiations between Washington and Brussels, with a deadline set by President Donald Trump for July 9, fail or prove unfavorable to the sector. Caught in this double bind, the cognac industry has entered a deep crisis and is questioning its future.
"I feel that in France, people are not fully aware of the problem: 80% of global cognac sales are made in China and the United States," said Bernard Arnault during his hearing before the Senate on May 21, describing a "major risk." The head of the LVMH luxury conglomerate, which owns the cognac house Hennessy, added that in a worst-case scenario, "with a 40% increase in Chinese customs duties and no agreement with the United States, there would be dramatic repercussions for Charente viticulture, which employs around 80,000 people."
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