China’s Xi greets EU Council president-elect ahead of EV tariffs taking effect

4 months ago 18

China’s President Xi Jinping made a congratulatory call on Thursday (4 July) to incoming European Council President Antonio Costa, Chinese state media said, a few hours before European Commission curbs on Chinese electric cars are scheduled to take effect.

The Commission is set to confirm provisional import tariffs of up to 37.6% on Chinese-manufactured electric vehicles (EVs), after the bloc accused the world’s No.2 economy of providing its firms with heavy state subsidies.

Xi said he “attaches great importance to the development of China-EU relations” as Europe braces for retaliatory measures from Beijing and the possible opening up of a new front in the West’s tariff war with the $18.6 trillion economy.

EU trade policy has turned increasingly protective over concerns that China’s production-focused development model could see it flooded with cheap goods as Chinese firms look to step up exports amid weak domestic demand.

China and the European Commission have been in negotiations since last week over the curbs that Beijing and some European automakers want scrapped. Beijing rejects accusations that Chinese EVs are unfairly subsidised.

Xi said China “is committed to developing the China-EU comprehensive strategic partnership,” according to the report. “China has always regarded Europe as an important pole in the multipolar order,” he added.

It will fall to Costa, a former Portuguese prime minister, to find common cause among the Council’s 27 member states, as they waver over whether to back the Commission on the EV tariffs in an advisory vote in coming weeks.

Germany, whose carmakers made a third of their sales last year in China, reportedly wants to stop the tariffs, while France has been among the firmest backers.

China is currently undertaking an anti-dumping probe into European brandy imports. Almost all EU brandy exports to China came from France last year, Chinese customs data shows.

Beijing has also opened an anti-dumping investigation into imports of European pork and its by-products, which analysts say is aimed at pressuring Spain, the Netherlands and Denmark to break with the Commission over the curbs.