By T. Jayani, JadeTimes News
The risk of rising Chinese electric car prices in the EU may be lessening as both parties have agreed to negotiate a planned series of import taxes. High ranking officials from both regions discussed the tariffs in a call on Saturday and decided to continue the discussions, despite ongoing tensions.
This call represents the first time the two sides have agreed to negotiate since the EU threatened China with electric vehicle (EV) tariffs of up to 38%. The EU argued that Chinese EVs were unfairly subsidized by the Chinese government. In response, China accused the EU of protectionism and violating trade rules.
An EU spokesperson described the call between Trade Commissioner Valdis Dombrovskis and his Chinese counterpart Wang Wentao as “candid and constructive.” They confirmed that both sides would continue to engage at all levels in the coming weeks. However, the spokesperson reaffirmed the EU's stance against the subsidization of the Chinese EV industry, stating that “any negotiated outcome” must address the “injurious subsidization” of Chinese EVs.
China issued a similar statement on Saturday, reiterating its disagreement with the EU's position. Additionally, Mr. Wentao met with German Vice Chancellor and Federal Minister for Economic Affairs and Climate Action Robert Habeck on Saturday. China’s Ministry of Commerce posted on Facebook that it had expressed “firm opposition” to the tariffs to Mr. Habeck and reiterated the threat to file a lawsuit with the World Trade Organization (WTO) to protect its rights and interests. Germany has also criticized the tariffs.
When the EU first proposed the tariffs following its investigation of Chinese EVs in the trading bloc, Germany's Transport Minister, Volker Wissing, warned that the move risked a "trade war" with Beijing. He wrote on X (formerly known as Twitter) that the European Commission's punitive tariffs would harm German companies and their top products.
The European car industry has also voiced concerns. Stellantis, which owns brands like Citroën, Peugeot, Vauxhall, and Fiat, stated that it does not support measures that contribute to the fragmentation of global trade.
The proposed tariffs range from 17.4% to 38.1%, depending on the brand and the extent of negotiations with the EU's investigation. These would be in addition to the existing 10% rate levied on all electric cars produced in China. The EU's intervention follows the US's more aggressive move last month, raising its tariff on Chinese electric cars from 25% to 100%.