Anti-Subsidy EV Dispute: China And EU Fail To Reach Mutually Acceptable Solution

Discussions between China and the European Union regarding the anti-subsidy case involving Chinese electric vehicles remain unresolved, with significant differences between the two sides. China’s Commerce Ministry said on Saturday that despite over 20 days of consultations, the talks have yet to yield a mutually acceptable solution.

Update on Consultations

The ministry provided an update on the recent consultations between Chinese and EU teams regarding the EU’s anti-subsidy investigation into Chinese battery electric vehicles. It said, “On September 19, Minister Wang Wentao and European Commission Executive Vice-President and Trade Commissioner Valdis Dombrovskis held talks and agreed to advance the price undertaking negotiations, with the commitment to finding a solution acceptable to both sides through friendly dialogue and consultation.”

Progress and Challenges

The ministry said that following over 20 days of talks, there has been notable progress in certain areas. However, a mutually acceptable solution remains unresolved. It stated, “Over the past more than 20 days starting from September 20, the Chinese and EU technical teams held 8 rounds of intense consultation. With their arduous effort, the two sides made significant progress in some areas. Taking into full consideration the needs and comments of Chinese and EU industries, the Chinese team demonstrated maximum sincerity and flexibility by offering many practical, constructive solutions to the EU’s specific concerns. Yet regrettably, the EU has failed to positively respond to matters relating to the core concerns of Chinese and EU industries. With major differences between the two sides, the consultations have been unable to produce a mutually acceptable solution.”

EU’s Tariff Decision

Notably, the European Union on October 4 voted to impose tariffs on Chinese battery electric vehicles. The Commission said that it represents another step towards the conclusion of its anti-subsidy investigation against China. As per reports, the EU will impose tariffs of up to 45 percent on Chinese electric vehicles.

“Today, the European Commission’s proposal to impose definitive countervailing duties on imports of battery electric vehicles (BEVs) from China has obtained the necessary support from EU Member States for the adoption of tariffs,” the EU announced in a statement.

Future Solutions

At the same time, the EU said it will continue to work hard to explore an alternative solution with China that would have to “be fully WTO-compatible, adequate in addressing the injurious subsidization” established by the Commission’s investigation.

US Tariffs on Chinese Products

Earlier this year, in May, the US administration also, in what it termed a protectionist measure to reduce trade imbalance, imposed heavy tariffs on various Chinese products including EVs and batteries. The US had emphasized that these measures are necessary to counter the flooding of global markets with low-cost Chinese products.

The US had stated that the tariff rate on electric vehicles under Section 301 will increase from 25 percent to 100 percent in 2024.

“With extensive subsidies and non-market practices leading to substantial risks of overcapacity, China’s exports of EVs grew by 70 percent from 2022 to 2023—jeopardizing productive investments elsewhere. A 100 percent tariff rate on EVs will protect American manufacturers from China’s unfair trade practices,” the White House had said in a statement.

(Except for the headline, this story has not been edited by Newsx staff and is published from a syndicated feed.)

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