Trade leaders from the EU and China discussed plans by Brussels to increase duties on Chinese electric cars in “candid and constructive” discussions on Saturday. The EU announced that more consultations would be undertaken between the two parties.
In a move that could spark a protracted trade war, the European Union issued a warning this month that it would impose additional duties of up to 38% on Chinese electric car imports starting in July following an investigation into anti-subsidy practices.
China’s Commerce Minister Wang Wentao and European Trade Commissioner Valdis Dombrovskis “had a candid and constructive call on Saturday on the EU’s anti-subsidy investigation into battery electric vehicles produced in China,” according to an EU spokesman.
“The EU side emphasised that any negotiated outcome to its investigation must be effective in addressing the injurious subsidisation,” spokesman Olof Gill said.
“The two sides will continue to engage at all levels in the coming weeks.”
China’s commerce ministry wrote on X that the two sides “agreed to start consultations” during the call.
When Brussels opened the probe last year to support European producers against a flood of lower-priced Chinese goods, Beijing became enraged.
A temporary increase in tariffs on Chinese manufacturers has now been recommended by the European Commission: 17.4% for market leader BYD, 20% for Geely, and 38.1 percent for SAIC.
According to the EU, the amount was determined by the enterprises’ receipt of state subsidies.
China’s electric vehicle manufacturers who complied with EU regulations will pay a 21 percent tariff; those who did not comply would pay a 38.1 percent charge.
This would be on top of the current import duty of 10 percent.The tariffs would apply provisionally from July 4 and then definitively from November.
However, the EU promised that it would “explore possible ways to resolve the issues” around subsidies when it announced that it would meet with China for talks.Despite being high, the tariffs levied by the EU are not as severe as the 100% rate that the US placed on Chinese electric automobiles last month.
With famous names like Mercedes and Ferrari, Europe’s automotive industry is the gem in its industrial crown. However, China’s early adoption of electric vehicles poses a threat to the European automotive industry.
Brussels seeks to stop what it perceives as unfair business practices that undercut European automakers, which have until 2035 to phase out new sales of cars with internal combustion engines.
