EU and China at negotiate to overcome “Electric Vehicle Crisis”: Warning of “Fundamental Shocks”

The EU and China have decided to hold further negotiations on alternatives to tariffs on electric vehicles, though significant gaps remain between the parties. The European Commission announced that the European Union (EU) and China had agreed to conduct additional technical negotiations on possible alternatives to tariffs on electric vehicles produced in China. However, the statement emphasized that major gaps persisted.

Following the anti-subsidy investigation sparked by the EU’s claim that cars produced in China are subsidized by the Chinese government, the EU announced it would impose an additional 35.3% customs duty on electric vehicles imported from China starting next week. However, discussions may continue even after this measure is implemented.

NEGOTIATIONS WILL CONTINUE

As an alternative to tariffs, the parties plan to consider potential minimum price commitments by Chinese manufacturers or their investments in Europe. The European Commission noted that after a video meeting between EU Trade Chief Valdis Dombrovskis and Chinese Commerce Minister Wang Wentao, both sides agreed to further technical negotiations.

The European Commission, as the body overseeing the trade policy of the 27-member EU, stated it had held eight rounds of technical negotiations with its Chinese counterparts and that “significant gaps remained.” It was noted that Dombrovskis and Wang had reaffirmed their commitment to ensuring a level playing field in the EU market and finding a solution aligned with World Trade Organization rules.