Luxury goods unlikely be targeted in China-EU trade spat: analysts
STORY: :: Luxury goods are unlikely to be the next target of China's EU trade retaliation, analysts say
:: Jacques Roizen, Managing Director of China Consulting, Digital Luxury Group
"If there were a new fiscal environment that forced luxury brands to increase their prices in China, what would happen is that it would create further incentive for Chinese consumers to make their luxury expenditures outside China, which is the opposite of what the government wants, which is why it is difficult to consider the hypothetical."
:: October 9, 2024
:: Albert Hu, Professor of Economics, China Europe International Business School
"At this point, neither EU nor China wants a full-scale trade war that would hurt both economies, which could use some help at this point. So I do hope some sort of compromise could be achieved between the two regions."
"So I think the bottom line is that the China wanted to tell EU that it is ready to retaliate but it is also ready to talk."
Roizen said targeting luxury goods in China would run counter to what has been consistently favorable policies for luxury firms in the world's second-largest economy, where Beijing is eager to keep more luxury spending, rather than see its consumers splurge in overseas markets.
So far, moves by China in the ongoing tit-for-tat trade spat with the EU have targeted brandy, pork and dairy, all of which are major industries for France, which lobbied for tariffs on Chinese-made EVs imported into the EU.
The very size of the luxury goods industry might make it a less likely target for Beijing, according to Hu.
He added that China's relatively careful orchestration of retaliatory targets thus far indicates Beijing is eager to continue negotiating and working towards a compromise with Brussels.