Welcome back to World Brief, where we’re looking at Chinese duties on European spirits, interest in a possible Hezbollah-Israel cease-fire, and Jammu and Kashmir’s legislative elections.
Glass Half Empty
Europe’s brandy producers are bracing for a potential hit to their bottom lines. On Tuesday, the Chinese Commerce Ministry announced temporary provisional tariffs of up to 39 percent on dozens of European spirits. Beijing has accused the companies of dumping and thus threatening “substantial damage” to China’s domestic producers.
Welcome back to World Brief, where we’re looking at Chinese duties on European spirits, interest in a possible Hezbollah-Israel cease-fire, and Jammu and Kashmir’s legislative elections.
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Glass Half Empty
Europe’s brandy producers are bracing for a potential hit to their bottom lines. On Tuesday, the Chinese Commerce Ministry announced temporary provisional tariffs of up to 39 percent on dozens of European spirits. Beijing has accused the companies of dumping and thus threatening “substantial damage” to China’s domestic producers.
The temporary policy, which will require Chinese importers to make a security deposit of the tariff amount with the country’s customs agency, will go into effect on Friday. The security deposit could potentially be returned to importers if a deal is reached before definitive tariffs are imposed.
The measures are widely seen as a tit-for-tat retaliation against the European Union. Just four days prior, the EU voted to impose tariffs of up to 45 percent on electric vehicles made in China. These duties will begin on Oct. 31 and last for five years. Experts expect Beijing to use its announcement as potential leverage to lower or eliminate the European tariffs, which the Chinese Commerce Ministry has called “unfair, non-compliant and unreasonable.”
Beijing has also contemplated duties on European pork and dairy products as well as gasoline-powered cars with large engines. However, it has avoided directly linking these decisions to the EU’s actions, as the World Trade Organization (WTO) forbids trade retaliation without first receiving the body’s permission.
Almost all of the affected European liquor brands will come from France, which accounts for 99 percent of all Chinese brandy imports, with trade reaching $1.7 billion last year. Beijing’s measures against French spirits are “incomprehensible” and violate free trade, said Sophie Primas, a French junior trade minister . She accused Chinese President Xi Jinping of breaking a promise made during a state visit to Paris last May to not impose duties on the industry. French President Emmanuel Macron had presented Xi with two bottles of cognac at the time. Macron has since called China’s brandy probe “pure retaliation,” and Paris has said it will work with the European Commission to challenge Beijing’s move at the WTO.
France has long supported the EU’s yearlong investigation into Chinese-made EVs, which aimed to determine whether Beijing was engaged in anticompetitive behavior that hurt European businesses. However, Germany—the bloc’s automaker powerhouse—has opposed the probe, fearing retribution.
Beijing’s idea was “to sow discord among EU member states and dilute a collective response,” Janka Oertel, the director of the European Council on Foreign Relations’ Asia program, told Foreign Policy. “The strategy has worked in the past.”
Following Tuesday’s announcement, European brandy-makers suffered sharp drops to their stocks. LVMH, the corporate parent of Hennessy, saw shares fall nearly 5 percent, while Remy Cointreau’s stocks dropped 8.7 percent. China is the European Union’s second-largest trading partner, and vice versa.
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Open to talks. Hezbollah deputy leader Naim Qassem expressed interest on Tuesday in working to establish a cease-fire with Israel, signaling the first known time that a high-ranking member of the Lebanese militant group has endorsed a possible truce deal without making it conditional on ending the war in Gaza. His statement comes exactly one year since Hezbollah resumed tit-for-tat strikes against Israel following Hamas’s Oct. 7, 2023, attack.
Much of Qassem’s speech, however, focused on Hezbollah’s ongoing war efforts. “If the enemy continues its war, then the battlefield will be decisive, and the battlefield belongs to us,” he said. That effort appeared to include firing more than 100 rockets at the Israeli port city of Haifa on Tuesday, forcing residents to limit public activities and gatherings.
Meanwhile, Syrian state media reported that an Israeli missile strike hit a residential building in its capital city of Damascus on Tuesday, killing at least seven people. Israel’s military has not commented on the attack, but it is known to have carried out operations against Iran-linked targets in Syria in the past, including a strike on an Iranian consular building in April that killed several senior officials from Iran’s Islamic Revolutionary Guard Corps. The building hit in Tuesday’s strike is in the same neighborhood as the Iranian Embassy.
Israel’s military also announced on Tuesday that it has deployed a fourth army division to southern Lebanon to bolster its now-weeklong ground incursion there. And Prime Minister Benjamin Netanyahu said the successor of late Hezbollah leader Hassan Nasrallah was killed during Israeli strikes on Beirut last week, in an apparent reference to Hashem Safieddine. Hezbollah has not commented Safieddine’s status.
Opposition victory. India’s ruling Bharatiya Janata Party (BJP) suffered a major defeat on Tuesday after securing just 29 seats out of 90 in Jammu and Kashmir’s legislative elections. The opposition Indian National Congress and its regional partner, the Jammu and Kashmir National Conference, won a comfortable majority with 48 seats.
This was the region’s first election since Indian Prime Minister Narendra Modi stripped Jammu and Kashmir of its special autonomy status in 2019. Turnout hit 64 percent over three voting phases—a significant change for a region with a long history of boycotting local elections.
Still, the BJP clocked a surprise win on Tuesday in the northern state of Haryana, securing 48 seats over Congress’s 37 seats. Congress said it will not accept the verdict, citing “serious issues” concerning the integrity of the vote-counting process. The opposition party was expected to win Haryana, but extensive BJP campaigning in the region and the party’s fresh selection of candidates may have swung the vote in its favor.
Cyberattack birthday gift. A group of hackers accused of being linked to Ukraine targeted Russia’s court information system for a second day on Tuesday. Calling themselves the “BO Team,” the group wiped court documents from the system’s database and targeted Russian state television, regional television, and radio stations to mark Russian President Vladimir Putin’s 72nd birthday, which occurred on Monday.
This was “an unprecedented hacker attack” on Moscow’s digital infrastructure, Kremlin spokesperson Dmitry Peskov said. Some of the courts’ official Telegram channels reported that their websites were out of service “for technical reasons.” Both Russia and Ukraine have accused each other of cyberattacks in recent years. Shortly after Russia’s full-scale invasion began in February 2022, Moscow targeted Kyiv’s power system, and in December 2023, a Russian attack on Ukraine’s main mobile operator impacted more than 24 million users.
Odds and Ends
Artificial intelligence developers took home the Nobel Prize in physics on Tuesday. Professors John Hopfield and Geoffrey Hinton, the latter of whom is known as the godfather of AI, were recognized for their work creating the building blocks of machine learning. Despite revolutionizing the technology, the two winners have also repeatedly warned of the risks associated with AI’s rapid development. “I am worried that the overall consequence of this might be systems more intelligent than us that eventually take control,” Hinton said on Tuesday.
The post Beijing Announces Tariffs on European Brandy appeared first on Foreign Policy.
