China has lodged a grievance with the World Trade Organisation (WTO) over additional tariffs imposed by the European Union (EU) on Chinese electric vehicles (EVs). The tariffs came into effect on Wednesday, a move that Beijing does not agree with, explaining that it follows an inquiry into subsidies to China’s EV industry by the EU. Beijing emphasised that numerous aspects of this investigation are not justifiable or in line with international regulations, labelling it disguised unfair trade protectionism masquerading as so-called “fair competition.”
Despite Beijing’s complaint to the WTO, both the EU and China expressed their intention to resolve their dispute through negotiation. Although the new tariffs are imposed for a five-year duration, if a different method of achieving its goal of preventing Chinese EVs from having an unfair advantage in the European market is found, the EU can lift them at any time.
The additional tariffs, which are in addition to the EU’s standard 10% on EV imports from China, affect different manufacturers to varying degrees. Tesla, led by Elon Musk and with manufacturing plants in China, is subject to an extra 7.8% tariff. Chinese car behemoth Geely, which is also the owner of Volvo, is facing an additional 18.8% tariff. Additionally, state-owned SAIC faces the steepest duty of 35.3%.
Despite only a small number of EU member states, including Ireland, supporting the additional tariffs when they were voted on in July, a lack of opposition meant the proposal couldn’t be blocked. The decision was implemented on Wednesday after being announced in the EU’s official gazette.
The EU’s Trade Commissioner Valdis Dombrovskis stated that the increases were proportionate, targeted measures, and were proof of the EU’s commitment to defending fair market practices and its industrial base. Brussels and Beijing failed to reach an agreement before Wednesday’s deadline on an alternative to the increased tariffs, but they will continue their talks in pursuit of a resolution, which may include setting a minimum price for Chinese-made EVs in the European market.
Furthermore, China has recently raised concerns about the EU’s practice of holding separate discussions with individual manufacturers while also engaging in official bilateral negotiations. In response, the EU noted that some companies were open to making agreements, justifying it as the correct approach.
The China Chamber of Commerce for Import and Export of Machinery and Electronic Products (CCCME) made a call on Wednesday for an end to tariffs, advocating for a consolidated approach to discussions with the EU, rather than striving for separate agreements. The chamber expressed their deep disappointment and dissatisfaction, characterising the issue as being politically motivated. “The tariffs on Chinese, American and European electric vehicle manufacturers based in China don’t augment the EU’s resilience in electric vehicle production, nor do they stimulate innovation or job creation,” the CCCME stated. Furthermore, Beijing has initiated anti-subsidy inquiries into select European products, including dairy items, a move that has the potential to impact Irish suppliers.