Inside China's Final Ruling on EU Brandy: How 34 Companies Dodged Anti-Dumping Tariffs

Key Points

China’s Ministry of Commerce (商务部) issued its final ruling on EU brandy anti-dumping on July 5, 2025.
34 EU brandy exporters were exempted from anti-dumping duties by successfully applying for a “price undertaking,” agreeing to specific pricing conditions.
A “price undertaking” allows companies to avoid tariffs by committing not to sell products below a certain price point, but can be terminated if violated.
China’s decision reflects a strategic move towards prudent use of trade remedy measures and a preference for resolving trade friction through dialogue and consultation, receiving support from both Chinese and EU industries.

Here’s the latest on the EU brandy anti-dumping saga with China, and it’s a masterclass in modern trade negotiation.

On July 5, 2025, China’s Ministry of Commerce (Shangwu Bu 商务部) dropped its final ruling on brandy imported from the European Union.

And it’s not the all-out tariff war some expected.

Instead, a strategic move allowed 34 EU companies to sidestep hefty duties.

Let’s break it down.

What Exactly Is the Final Ruling on EU Brandy Imports?

A reporter asked China’s Ministry of Commerce a key question: why are some EU companies getting a pass on anti-dumping duties?

The ministry spokesperson laid it out clearly.

Here’s the deal:

34 EU brandy exporters successfully applied for something called a “price undertaking.”
These companies will not be hit with anti-dumping duties.
This is because they agreed to a specific set of pricing conditions for their exports to China.

Key Details of China’s Final Anti-Dumping Ruling (July 5, 2025)
Aspect	Details
Date of Ruling	July 5, 2025
Affected Product	Brandy imported from the European Union
Outcome for 34 EU Exporters	Exempted from anti-dumping duties
Mechanism for Exemption	“Price undertaking” agreement
Undertaking Condition	Agreement to specific pricing conditions for exports to China

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The ‘Price Undertaking’ Playbook, Explained

So, what exactly is a price undertaking? This is the key to the whole situation.

Think of it like a gentleman’s agreement, but with serious financial consequences.

In the world of trade defense, a price undertaking is a commitment from an exporting company to not sell its products below a certain price point.

The spokesperson from China’s Ministry of Commerce explained it like this:

“In anti-dumping practices, if the investigating authority accepts price undertakings made by the 涉案 (shè’àn) [implicated] exporting enterprises – meaning their future export prices will not fall below a certain level – then these exports will not be subject to anti-dumping duties.”

Basically:

The Deal: EU companies promise not to “dump” or sell their brandy too cheaply in the Chinese market.
The Reward: In return, China agrees not to slap them with punitive anti-dumping tariffs.

But there’s a catch.

This isn’t a “get out of jail free” card for life.

The spokesperson added a critical warning: “if… there is evidence proving… that the enterprises concerned have violated their price undertakings, the price undertaking may be terminated, and duties will be reinstated.”

The message is clear: stick to the deal, or the tariffs are back on the table.

Why Did China Accept These Deals? The Strategy Behind the Ruling

This wasn’t just a random decision. It was a calculated move.

When asked about the specific reasons for accepting the price undertakings, the spokesperson revealed the strategic thinking.

First, it aligns with China’s legal framework and preference for caution.

The official stated, “China has consistently advocated for the prudent use of trade remedy measures.” The decision was made after a detailed legal review and was found to be the best way “to maintain a fair competitive market order.”

Second, it had broad support from both sides.

This is the fascinating part. It wasn’t a one-sided win.

The Chinese domestic industry expressed support for the ruling.
The EU industry also welcomed the use of price undertakings.

Finding common ground in a trade dispute is rare, making this a significant diplomatic achievement.

Finally, it’s a powerful signal about China’s approach to global trade.

The spokesperson concluded that accepting these price undertakings “once again demonstrates China’s stance of seeking to resolve trade friction through dialogue and consultation.”

Strategic Rationale Behind China’s Decision

Legal Framework & Prudence: Aligns with China’s advocacy for “prudent use of trade remedy measures.” Decision made after a detailed legal review to maintain fair market competition.
Broad Industry Support: Supported by both Chinese domestic industry and the EU industry, indicating a mutually agreeable solution.
Signal for Global Trade: Demonstrates China’s preference for resolving trade friction through dialogue and consultation, rather than escalating disputes.

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The Bottom Line for Investors and Brands

This case offers a playbook for how foreign companies can navigate complex trade investigations in China.

It shows that China’s Ministry of Commerce is open to negotiation and prefers de-escalation over all-out trade wars, especially when foreign companies and industries engage proactively.

For brands and investors, the key takeaway is that engaging in dialogue and exploring legal mechanisms like price undertakings can lead to favorable outcomes.

This final ruling on EU brandy anti-dumping isn’t just about cognac; it’s a signal of a more nuanced and pragmatic approach to resolving international trade disputes.