EU leaders have given the green light to extra anti-subsidy tariffs on electric vehicle imports from China despite opposition from five countries, including Germany, where car manufacturers condemned the decision as a potential “fatal” blow for the auto industry. The European Commission – which provisionally approved the tariffs in June after an inquiry found that Beijing’s state aid to auto manufacturers was unfair – now has free rein to impose them for five years from the end of this month. The tariffs of up to 35.3% on top of existing duties of 10%, were supported by 10 member states, including France, Italy and Poland, several European diplomats told the AFP news agency. Only five nations, including Germany and Hungary, which has significant investments from China, voted against, while 12 abstained, including Spain and Sweden. BMW and Volkswagen criticized the EU decision. BMW said it was a “fatal signal” for the European car industry, while VW said it was the “wrong approach”.
China condemned the vote as protectionist and called on the EU to return to the track of negotiations to resolve trade disputes. “We strongly encourage the EU to delay the implementation of these tariffs, and prioritize resolving disputes and trade tensions through consultations and dialogue,” the China Chamber of Commerce to the EU said in a statement. Rejecting the tariffs would have required the objection of at least 15 EU nations representing 65% of the bloc’s population. The levies due to come into force on October 31 for a period of five years range from 7.8% extra duties on Tesla cars manufactured in China to 35.3% for cars made by SAIC, including the British brand MG.
China's Ministry of Commerce (MOFCOM) said that China has always maintained the utmost sincerity in properly handling differences through dialogue and consultation. China and the EU have held more than 10 technical consultations at the bureau level and two vice ministerial consultations regarding the anti-subsidy case for EVs since the end of June. On September 19, Minister Wang Wentao held a comprehensive, in-depth and constructive meeting with European Commission Executive Vice President and Trade Commissioner Valdis Dombrovskis. Both sides clearly expressed their political will to resolve differences through consultations and agreed to initiate talks on price commitments to avoid escalation of the dispute. In the short 14 days that followed, the China-EU technical teams conducted six rounds of technical consultations. China repeatedly listened to the demands and opinions of both Chinese and European industries and demonstrated an open and cooperative attitude throughout the consultation process, showing maximum flexibility, the Ministry said.
By adhering to a market-driven approach and fostering full competition and continuous independent innovation, Chinese EVs have enhanced the quality supply of global green public goods, making significant contributions to the global response to climate change. The EU's protectionist practices seriously violate WTO rules, disrupt the normal international trade order, hinder China-EU trade and investment cooperation, delay the EU's green transition, and will also negatively impact global efforts to combat climate change, the Ministry said.
MOFCOM said that the China-EU technical teams would continue negotiations on October 7 until October 30, but if an agreement is not reached the new tariffs will be implemented on October 31. China hopes the EU will recognize that imposing tariffs will not solve any problems; rather, it will only undermine and hinder the confidence and determination of Chinese enterprises in investing and cooperating with the EU.
This overview is based on reports by The Guardian, Global Times, China Daily and South China Morning Post.
