China seeks WTO talks over EU’s EV tariffs, says trade rules ‘severely’ violated

Trade frictions between China and the European Union escalated on Friday, as Beijing announced its decision to take the bloc’s import tariffs on Chinese electric vehicles to the World Trade Organization for arbitration. In an online statement, a Ministry of Commerce spokesman said China had filed a lawsuit against the EU at the intergovernmental organisation over its preliminary ruling announced in early July. “The EU’s preliminary ruling lacks factual and legal basis, seriously violates WTO rules, and undermines global cooperation in addressing climate change,” the spokesman said. “We urge the EU to immediately correct its wrongdoing and join hands to safeguard bilateral economic and trade cooperation, as well as the stability of EV industrial chains.” The move by China came after the EU’s additional duties of up to a revised 37.6 per cent on Chinese-battery electric vehicles took effect on July 5 and would initially last for a maximum of four months. A European Commission spokesperson said they “took note” of Beijing’s request for consultations. “The EU is carefully studying all the details of this request and will react to the Chinese authorities in due course according to the WTO procedures. The commission is confident of the WTO-compatibility of its investigation and provisional measures,” they said. While the tariffs have been provisionally set, they will need to go to a vote of the EU’s 27 member states before November. At that point, a majority of capitals would have to vote against the duties to stop them becoming permanent. Until then, both sides have said they are open to negotiations. These talks have thus far yielded little progress, EU sources said. In a non-binding vote last month, only four member states – Hungary, Slovakia, Cyprus and Malta – voted against the provisional duties, signalling there was no broad-based opposition. Among those abstaining were Germany and Sweden, which have criticised the EV spat but whose government wished to give the commission space to negotiate a settlement with Chinese counterparts. This week, EU trade chief Valdis Dombrovskis said he expected that the tariffs would remain in place after November. “It’s clear that member states realise the need to protect the EU’s car industry because this risk of injury is there. Chinese battery electric-vehicle market share is growing very rapidly. That subsidisation is there,” he told the Financial Times. Wang Yiwei, director of the Centre for European Studies at Renmin University of China and a Jean Monnet Chair professor, said the commerce ministry’s move could be a sign the talks with the EU may not be going well and would not be sufficient to resolve the EV subsidy issue. “The EU has said it is too late to talk, as the bloc faces internal pressure to stem the arrival of Chinese EVs,” Wang said. “Its choice to enact punitive measures is like a decision cast in stone.” Getting the WTO involved could be a tactic to influence some enterprises and business chambers within the EU since not all member states have resolved to act against Chinese EVs, he added. “More time is needed for the talks between China and the EU, and for EU member states to assess the issue and the ramifications of the EU’s measures.” Jorge Toledo, the EU ambassador to China, said last month that Beijing had only recently responded to the EU’s tariffs after the bloc had requested consultation for months – a claim the ministry refuted. Wang warned that the WTO’s process to resolve trade disputes is a long and complicated one. “But China has proof the EU’s previous probe of Chinese EV manufacturers could have violated WTO rules or standards, as some EV firms complained about being asked by the EU to provide sensitive information,” he added. “China is using the WTO platform to uphold the interests of its EV sector.” In the aftermath of Brussels’ initial tariff decision, China announced an anti-dumping investigation into certain pork products imported from the bloc on June 17. China also began a trade-and-investment-barrier investigation on July 10, examining how the EU’s Foreign Subsidy Regulation had affected Chinese companies. An anti-dumping probe into EU brandy imports is also ongoing. This is aimed at French cognac brands, which account for the lion’s share of the trade. France is among the most vocal backers of the EU’s EV action against China. Chinese businesses in Europe welcomed Beijing’s move, saying that “wrongly blaming foreign competition for industry problems will only reduce effective competition”. In a statement, the China Chamber of Commerce to the EU said the bloc’s anti-subsidy probe left mainland carmakers vulnerable to other punitive action. “Once the anti-subsidy investigation on electric vehicles labels Chinese carmakers as ‘subsidised’, the risk of their investment, production and operation in Europe being investigated by the EU Foreign Subsidies Regulation will be greatly increased,” the chamber said, referring to the sweeping new law EU authorities have used to root out state handouts on the books of companies operating within its single market.

China seeks WTO talks over EU’s EV tariffs, says trade rules ‘severely’ violated

.css-1mniedq{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;}China urges European Union to correct the ‘wrongdoing’ of its import tariffs on Chinese electric vehicles

China urges European Union to correct the ‘wrongdoing’ of its import tariffs on Chinese electric vehicles