Beijing: China announced on Thursday that it will not impose provisional tariffs on European brandy imports, even though an investigation found evidence of dumping that threatened the domestic brandy industry.

The Ministry of Commerce launched the probe in January following a complaint by China's liquor association, representing the local brandy sector. The investigation revealed that brandy from the European Union had been dumped into the Chinese market, potentially causing significant harm to the domestic industry.

Despite these findings, the Ministry of Commerce stated that no provisional anti-dumping measures will be implemented at this time, though it did not rule out the possibility of future tariffs.

The news led to a rally in shares of major French spirits companies, including Remy Cointreau and Pernod Ricard, which are key exporters of brandy to China.

In 2022, China imported more brandy than any other spirit, with the majority coming from France, according to Daxue Consulting.

This development comes amid escalating trade tensions between China and the European Union. Earlier this month, Beijing launched an investigation into EU subsidies for certain dairy products, following the EU's decision to impose import duties of up to 36 percent on Chinese electric vehicles. The ongoing trade dispute now includes a range of items, including fresh cheese, curd, and some milk and cream.