China urges EU to ‘meet halfway’ on electric vehicle dispute

2 months ago 18

China’s commerce ministry urged the European Union to “meet halfway” to resolve the ongoing trade dispute over electric vehicles (EVs) after the EU Commission confirmed preliminary tariffs on Thursday (4 July) – prompting even harsher criticism from Chinese businesses.

In a statement issued after the EU executive confirmed provisional tariffs of between 17.4% and 37.6% on China-made EVs will start from Friday (5 July), the Chinese Commerce Ministry stressed its “strong opposition” to the decision and called for the feud to be “resolved through dialogue and consultation”.

The ministry added that Brussels should use the “four-month window” before the levies fully come into force in November to negotiate a solution.

“We expect the EU to meet China halfway, demonstrate good faith, and intensify efforts to advance the consultation process based on facts and rules,” it said.

Chinese business representatives in Brussels echoed the ministry’s proposal to resolve trade jitters diplomatically—although their language was less conciliatory.

The China Chamber of Commerce to the EU, representing Chinese firms operating across the bloc, said it was “deeply disappointed and dissatisfied” with the Commission’s decision.

“We firmly oppose this politically-driven trade protectionist move by the European side,” it said in a statement.

“To correct this trade protectionist practice,” the trade body said, “Chinese enterprises in Europe expect the European Commission to work with the Chinese side to find a constructive solution before the final ruling in November.”

Notably, the Commission’s imposition of provisional tariffs – which are also referred to as “countervailing duties” as they are meant to offset the effect of distortive market factors- was deemed by influential German and Austrian economists to be in line with a “doctrine [that] aims for trade policy to be ‘open, sustainable, and assertive’ “.

Unlike existing 10% import duties, “with the countervailing duties, the EU supports the multilateral trading system and fair competition,” the Austrian Institute of Economic Research said on Thursday.

Business umbrella group BDI, meanwhile, urged EU officials “to use the time window until November “for intensive talks with Beijing” and to ensure the bloc’s stance reflects the variety of European interests.

“A negotiated solution” whereby “China makes binding commitments to reduce state subsidies would be the best way forward,” the association said.

The Commission has recently confirmed the two blocs have started talks to resolve the trade dispute, with trade Commissioner Valdis Dombrovskis saying that the EU executive was “continuing to engage intensively with China on a mutually acceptable solution.”

However, Dombrovskis added that any resolution “must clearly and fully address EU concerns” about Chinese state subsidisation and comply with World Trade Organisation (WTO) rules.

[Edited by Anna Brunetti/]Alice Taylor]