EU and China begin discussions on proposed EV tariffs
What's the story
China and the European Union (EU) have initiated talks concerning the proposed tariffs on Chinese-made electric vehicles (EVs) entering the European market. The news was confirmed by Germany's Economy Minister, Robert Habeck, who was informed about the upcoming negotiations by EU's executive VP Valdis Dombrovskis. This development follows a statement from China's commerce ministry that its head, Wang Wentao, and Dombrovskis had agreed to start consultations over the EU's anti-subsidy investigation into Chinese EVs.
Trade talks
Habeck emphasizes open dialog and fair trade practices
Habeck described the initiation of these discussions as "new and surprising," stating that a concrete negotiation timetable had not been possible in recent weeks, he said during Shanghai visit. Habeck also emphasized that this was only the first step, with many more to follow. The minister expressed his belief in open markets but stressed the need for a level playing field, indicating that there is time for dialog on tariff issues before they come into full effect in November.
Tariff timeline
EU's provisional duties on Chinese EVs set for July
The EU has set provisional duties of up to 38.1% on imported Chinese EVs, which are due to apply by July 4. The investigation into these tariffs will continue until November 2, at which point definitive duties could be imposed, typically lasting for five years. Habeck emphasized that this period opens a phase where negotiations are possible and dialog is needed.
Purpose
Habeck clarifies EU tariffs not a punishment
Habeck clarified to Chinese officials that the proposed EU tariffs on Chinese goods are not a "punishment." He added that "Europe does things differently" compared to countries like the US, Turkey, and Brazil, which have used punitive tariffs. Habeck said that the European Commission has spent nine months examining whether Chinese companies had unfairly benefited from subsidies. Any countervailing duty measure resulting from the EU review is intended to compensate for advantages granted to Chinese companies by Beijing.
Chinese stance
China's response to proposed EU duties on EVs
In response to the proposed duties, Zheng Shanjie, chairman of China's National Development and Reform Commission (NDRC), pledged to protect Chinese companies. He warned the proposed EU duties on Chinese-made EVs would hurt both sides and expressed his hope that Germany would showcase leadership within the EU and "do the correct thing." Zheng denied accusations of unfair subsidies, attributing the growth of China's new energy industry to comprehensive advantages in technology, market, and industry supply chains, fostered through fierce competition.