China has filed a complaint at the World Trade Organisation (WTO) against the European Union after extra tariffs on Chinese electric vehicles (EV) came into force on Wednesday. China’s commerce ministry said it did not accept the EU’s decision, which followed an investigation into Beijing’s subsidies for its EV industry.
China has repeatedly pointed out there are many practices in the investigation that are simply unjustifiable and not compliant with the rules. The nature of the investigation is unfair trade protectionism disguised as so-called “fair competition”, the ministry said in a statement.
Although Beijing has filed a complaint against the EU under the WTO’s dispute settlement mechanism, both sides said they would continue to seek a negotiated settlement to the dispute. The new tariffs have been imposed for a five-year period but the EU can lift them at any time if it finds a different way to achieve its stated aim of ensuring that Chinese EV’s do not compete in the European market with an unfair advantage.
The new tariffs, which come on top of the EU’s standard 10 per cent on imports of EV’s from China, apply at different rates to various manufacturers. Elon Musk’s Tesla, which manufactures in China, faces an extra tariff of 7.8 per cent; Geely, the Chinese car giant which owns Volvo, is hit by an extra 18.8 per cent; and state-controlled SAIC will face the highest additional duty of 35.3 per cent.
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Only a minority of EU member-states, including Ireland, voted for the extra tariffs in July but more countries abstained and opponents of the European Commission’s proposal failed to assemble a blocking minority. The decision came into force on Wednesday after it was published in the EU’s official journal.
“By adopting these proportionate and targeted measures after a rigorous investigation, we are standing up for fair-market practices and for the European industrial base,” EU trade commissioner Valdis Dombrovskis said.
Talks between Beijing and Brussels failed to reach an agreement ahead of Wednesday’s deadline on an alternative to the extra tariffs. But they will continue to negotiate towards a solution, which is likely to involve Chinese manufacturers agreeing to set a minimum price for their EVs in the European market.
China complained in recent weeks that while the EU was engaged in official bilateral negotiations, it also opened talks with individual manufacturers. The EU said that some companies had shown themselves willing to strike deals and that it was right to pursue such possibilities.
The China Chamber of Commerce for Import and Export of Machinery and Electronic Products (CCCME) on Wednesday called for a halt to the tariffs and urged the EU to pursue a unified negotiation rather than seeking individual deals.
“These tariffs on Chinese, European and US EV producers based in China neither strengthen the EU’s EV manufacturing resilience, nor foster innovation or job creation. We deeply regret and are dissatisfied with what we view as a politically driven approach,” the chamber said. Beijing has launched its own anti-subsidy investigations into a number of European products including dairy goods, which could affect Irish producers.
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