Chinese Tariffs
When the EU decided to impose tariffs and restrictions on Chinese Electric Vehicles entering the EU this summer, there was little thought about the law of unintended consequences. That came home yesterday when China retaliated by requiring Brandy imports into China to be accompanied by security deposits of between 34 and 39%. Martell, Remy Martin and Hennessy are the key brands and their owners LVMH, Period Ricard and Remy Cointreau all suffered markdowns on their shares immediately of between 4 and 9%. The EV tariffs were largely to the benefit of the beleaguered German auto industry but the retaliation was meted out on the almost exclusively French brandy industry. China imports 99% of its brandy consumption and spends USD 1.7 billion each year on the digestif.
EUR/USD 1.0980.