China's Ministry of Commerce (MOFCOM) said that there remain major differences between China and the EU in the negotiations over the dispute on electric vehicle (EVs) tariffs as the EU failed to positively respond to core concerns of Chinese and EU industries. Still, China has invited the EU side for a new round of face-to-face consultations. Meanwhile, as recent talks have so far failed to yield a mutually acceptable deal, there has been growing criticism of the European Commission (EC) that spearheaded the whole dispute. German Chancellor Olaf Scholz criticized the EC's decision and called for an agreement with China. Scholz said during a speech to parliament that 17 other EU member states were skeptical as well as all the executives of carmakers with whom he had spoken. “My request is that we come to an agreement between China and the European Union,” he said.
While EU leaders have publicly stated a commitment to negotiations, the EU side has not demonstrated sufficient sincerity during the actual talks, sources have told the Global Times. Amid the growing criticism, including those from within the EU, the EU side should show sincerity and earnestly work with China to reach a mutually acceptable deal, experts said.
Responding to a question about the progress of China-EU EV negotiations at a press conference, MOFCOM Spokesperson He Yadong said that China has so far shown the greatest sincerity and flexibility and the two sides have made important progress in some areas. “However, because the EU side has never positively responded to issues related to the core concerns of Chinese and EU industries, there are still major differences in the consultations,” He said. MOFCOM has formally invited the EU technical team to China to continue the next phase of face-to-face consultations as soon as possible. “We have made all preparations for this and are waiting for a reply from the EU side,” He said. When asked about whether China is considering increasing tariffs on imported cars with large-displacement engines, He said that “China is studying measures such as increasing tariffs on imported vehicles with large-displacement fuel vehicles and will make a prudent decision after comprehensively considering all factors.” MOFCOM is studying the potential tariff hike on large-engine cars, including meeting with automakers in August to solicit opinions and suggestions. If tariffs on large-engine cars are raised, it will have a major impact on auto imports from the EU, a Chinese auto industry insider told the Global Times in May.
The EC's plan to impose hefty additional tariffs on Chinese EVs has sparked widespread concerns among Chinese and EU industries, as such a move would not only undermine the EV trade but also the broader China-EU cooperation. In particular, such concerns are growing in some EU member states such as Germany, which has a massive auto industry that has a huge presence in the Chinese market. Such reluctance is also reflected in the EC's approach toward the negotiations. EC leaders, including President Ursula von der Leyen, have publicly said that they will continue negotiations with China. But by making unreasonable demands, not responding positively to sensible offers from the Chinese side, and attempting to divide Chinese electric vehicle (EV) producers in negotiations, the EU side has not demonstrated sufficient sincerity and resorted to tactics that may have undermined the talks. The EC is continuing negotiations, while at the same time seeking to undermine the negotiation process by conducting separate negotiations with EV makers, the Global Times reports.
