French Cognac Producers Squeezed by EU Trade Disputes with China and US

As this year's grape harvest wraps up along the Charente River in southwestern France — the only place where Cognac is produced — winegrowers already anticipate another tough year ahead. The 300-year-old brandy industry has found itself caught in the crossfire of EU trade disputes with China and tensions with the United States, its largest export market.

Since 2023, Cognac sales have dropped from 230 million to 140 million bottles. The industry depends almost entirely on exports, with 98% of production sold outside the EU. The four major trading houses have been forced to cut orders from winegrowers after clients cancelled contracts.

Fallout from the EU-China dispute

The trouble began with the trade conflict between Brussels and Beijing over Chinese electric vehicles. Raphaël Delpech, head of the National Interprofessional Cognac Bureau, described the industry as having become collateral damage. In 2024, China imposed provisional duties of up to 34.8% shortly after the EU set tariffs on Chinese EVs. Although major producers were later granted exemptions, distributors had already begun pulling Cognac from their shelves.

A second blow came from the United States, which accounts for roughly half of Cognac exports. In April 2025, President Donald Trump imposed sweeping tariffs, and the EU and US later agreed on a 15% tariff covering most European exports, including Cognac. Despite subsequent talks about possible exemptions, little progress has been made — in contrast to the United Kingdom, which secured the removal of US tariffs on whisky.

This year's drought reduced the harvest by 30-40%, which has helped ease oversupply. The industry has launched vine-removal support schemes, though uptake has been limited. Cognac supports around 70,000 direct and indirect jobs in France. French President Emmanuel Macron has promised compensation to winegrowers, but none has arrived so far.