Hangover for leathergoods brands as China hits back
Luxury leathergoods brands suffered drops of up to 6% in the price of their shares on October 9 as the intensity of trade disputes between China and the European Union increased.
Following approval from European Union member states at the start of October for the imposition of “definitive countervailing duties” on imports of battery electric vehicles (BEVs) from China, a response came on October 8.
The commerce ministry in Beijing announced that China will now impose anti-dumping duties on imports of cognac and other brandies from Europe. The ministry said it had carried out an extensive investigation and found that European companies were selling these spirits at a lower price in China than in their home markets, presenting possible substantial damage to the domestic drinks industry.
Share prices of prominent spirits brands in Europe suffered an almost immediate drop in the value of their shares and falls in the prices of shares in leathergoods groups followed soon afterwards.
Analysts have explained that investors fear the imposition of tariffs on leathergoods too as one of the next steps China may take in response to the BEV decision.
The European Commission said on October 9 that it would assess possibilities for offering support to EU producers facing “the negative impact of this unwarranted decision by the government of China”.
It added: “The Commission will always stand firmly and fearlessly on the side of EU producers, industry, open and fair trade, and a global level playing field.”
