French cognac producers are hopeful after recent diplomatic discussions between France and China signaled a possible rollback of tariffs that have hit their industry hard. The tariffs were introduced by China in 2019 as part of a wider trade dispute and have made French cognac significantly more expensive in one of its largest markets.
The talks included a phone call between Chinese President Xi Jinping and French President Emmanuel Macron, which showed signs of warming trade relations. Industry insiders say these discussions are progressing well and could lead to the reduction or removal of tariffs on French cognac.
China imposed a 25% tariff on French cognac following EU sanctions related to China’s policies in Hong Kong and Xinjiang. Before these tariffs, China was the world’s second-largest market for French cognac. The tariffs have caused a steep decline in exports and sales, affecting many producers who rely on the Chinese market for growth.
The higher costs in China have made French cognac less competitive, forcing some producers to scale back production or look for new markets. Despite the setbacks, French cognac remains an important cultural and economic product for France, known worldwide for its quality and tradition.
Improving diplomatic relations between France and China could open doors for French cognac businesses to regain their foothold in the Chinese market. A tariff rollback would not only help revive the industry but also support jobs and economic activity in the regions that produce cognac.
Trade groups and French officials are closely watching the ongoing talks and remain optimistic about reaching an agreement. Producers are preparing for increased demand if tariffs are eased, investing in marketing and product development targeted at Chinese consumers.
