The European Union and China have agreed to further engage in technical consultations regarding battery electric vehicles (BEVs) in a bid to avoid trade tensions as potential tariffs loom.
Valdis Dombrovskis, European Commission Executive Vice President and Commissioner for Trade held a video call on 25 October with the Chinese Minister of Commerce, Wang Wentao, focused on the ongoing investigation into imports of BEVs from China.
The call followed the EU’s decision in favour of imposing tariffs of up to 35.3 per cent on Chinese-made electric cars in a vote that saw Member States split – 10 backed the measures, five voted against (including Germany), and 12 abstained.
The vote was held by the European Commission’s Trade Defence Instruments Committee acting on DG Trade’s investigation into new battery electric vehicles for passengers.
The decision drew harsh criticism from Beijing. Unsurprisingly.
A spokesperson for the Ministry of Commerce said, “China hopes the EU will remain sober-minded that the imposition of tariffs will not solve any problems, but will only shake and stunt the confidence and determination of Chinese businesses in investing and cooperating with Europe.”
The move was also criticised by the automotive sector.
BMW’s chief executive Oliver Zipse called it a “fatal signal”, while Volkswagen said it was the “wrong approach”. Germany’s auto industry association called the country’s against vote the “right signal” for the industry.
The tariffs are to be applied on top of the bloc’s standard 10 per cent car import levy.
According to the Atlantic Council, Chinese sales of EVs abroad rose 70 per cent in 2023, reaching $34.1 billion. Almost 40 per cent went to the EU.
As an alternative to tariffs, the two sides are looking at possible minimum price commitments from Chinese producers or investments in Europe, agreeing to further technical negotiations that would take place “shortly”.
The China Chamber of Commerce to the EU (CCCEU) welcomed the agreement, arguing that constructive discussions are essential for building trust and fostering mutual benefits between China and the EU in the EV sector.
Both Dombrovskis and Wang reaffirmed their political commitment to finding a mutually accepted solution, which would address the level playing field in the EU market and be compatible with the rules of the World Trade Organisation, the Commission remarked.
Separate negotiations with companies
Once more, the Commission did not exclude the possibility of holding separate negotiations with individual companies participating in the investigation, despite strong calls from China to avoid such a step.
The CCCEU reiterated that “a unified negotiation” through the China Chamber of Commerce for Import and Export of Machinery and Electronic Products (CCCME) would better support fair competition and consistency across the sector.
“A collaborative framework through CCCME can foster a balanced outcome that respects the interests of all parties. We encourage the EU to consider this approach for a more cohesive, mutually beneficial dialogue,” the CCCEU said.
Earlier in October, Brussels rejected a Chinese proposal to set a minimum price of €30,000 for Chinese-made EVs. Beijing hoped such a move would avoid EU tariffs being imposed starting in November.
China highlighted that various manufacturers, including European-owned companies in China, have authorised the CCCME to propose a unified price commitment plan, which serves as the basis for the current China-EU discussions.
European brandy, pork and dairy probes
During the video call, Dombrovskis also raised concerns about the ongoing Chinese anti-dumping case against brandy and the initiations on pork and dairy, calling them “unsubstantiated”.
In September, the Commission filed an official complaint with the WTO over China’s retaliatory anti-dumping probe into EU dairy products. The move escalated tensions following a meeting between Dombrovskis and Wang.
China has also filed an appeal with the WTO about the Commission’s EV probe, stating that the ruling “lacks a factual and legal basis” as well as “undermines the overall situation of global cooperation in addressing climate change”.
[Edited By Brian Maguire | Euractiv’s Advocacy Lab ]