The Chinese Ministry of Commerce recently held a press conference. At the event, a top official, He Yadong announced that China and the EU are starting talks about the EU’s probe into subsidies on Chinese electric vehicles. This dialogue aims to find a way that both sides can agree on. This is coming at a time where there are intense concern from China.
China’s Stand on the Probe
China has voiced strong objections to the EU’s probe into subsidies on its electric vehicles. He Yadong said that China prefers to handle economic and trade disputes through dialogue. He also claims China is ready to talk rather than the use of punitive measures. This approach reflects China’s broader strategy of tackling trade issues diplomatically.
When asked by a Reuters about China’s potential actions if the EU proceeds with tariffs, He Yadong assured that working teams from both sides are actively in talks. The talks are to find a middle line that both parties will accept. This aligns with China’s efforts to address and resolve most of the concerns of both parties have.
Background of the Probe
On June 20, He Yadong said at a press conference that Chinese brands had reported the European Commission’s extensive demands for information. This include full data on production, development plans, technical processes, and product formulas. All these data must relate to the Chinese electric vehicles and their batteries.The scope of the data that the EU is asking for is quite wide. It far exceeds the typical needs for boides such as the EU for such probe.
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The European Commission warned that failure to comply with these demands would lead to unfavorable rulings. Despite the Chinese brands efforts to fully comply and provide the data, they were still accused of non – cooperation. For this reason, the EU had to slam high punitive tax rates on these brands. This outcome left Chinese brands feeling shocked and not happy about the situation.
China’s Response to the EU’s Actions
China has firmly opposed the EU’s practices, arguing that they lack a factual and legal basis. Moreover, China believes these actions violate World Trade Organization (WTO) rules. China also claims the action undermine fair competition, and hinder global green transformation and open cooperation. In response, China has vowed to take all necessary measures to defend the legitimate rights of its companies.
Proposed EU Tariffs
The European Commission announced on June 12 its proposal. The proposal is to impose temporary duties on electric vehicles imported from China starting July 4. The proposed tariff rates are as follows:
- A 17.4% tax on BYD
- A 20% more tax on Geely
- A 38.1% tax increase on SAIC Motor
- More tariffs of 21% on other electric vehicle brands cooperating with the probe
- A 38.1% tariff on all other electric vehicle brands not cooperating with the probe
These proposed tariffs represent a huge financial burden for Chinese electric vehicle brands. It further escalates trade tensions between China and the EU.
Conclusion
The ongoing consultations between China and the EU mark a critical step towards resolving the current trade dispute over electric vehicle tariffs. Both sides aim to reach a solution that addresses their respective concerns while maintaining fair competition and supporting global green transformation. As the situation develops, the outcome of these talks will have significant implications for the future of international trade and cooperation in the electric vehicle industry.
