Consultations way to resolve China-EU disputes on EV tariffs

The European Union will press ahead with hefty tariffs on China-made electric vehicles, an EU executive said on Friday, despite a rift over its biggest trade row with Beijing in a decade.

The proposed duties on Chinese-made EVs, except those of foreign brands built in the country, of up to 45 percent, markedly higher than the previous around 37 percent rate, aims to offset the competitiveness of Chinese-made EVs in their cost performance in the EU market.

The EU attributes the Chinese-made EVs' low price in the EU market to State subsidies, a claim it has failed to provide any substantial evidence to back after months of probe.

The Chinese-made EVs' competitiveness originates from the Chinese EV makers' long-term and big input into the research & development of some core technologies such as those related to EV power batteries, as well as the scale effect of China's huge and complete manufacturing base.

That's why some leading EU carmakers, particularly those from Germany, oppose the EU's tariffs, and they believe the competition and cooperation with their Chinese counterparts are conducive to the EU's EV industry enhancing its global competitiveness.

Notably, the European Commission said it would continue talks with Beijing to find an alternative solution, and it is widely believed a possible compromise could be to set minimum sales prices.

Exports to the EU comprised about 30 percent of the Chinese EV makers' exports over the past three years. Last year, China exported nearly half a million units of EVs to the EU market, with Belgium, Spain and Germany being the major importers.

The EU policymakers are well aware that the punitive tariffs, if imposed, will also hurt the interest of EU consumers and slow down the bloc's green transition. Not to mention Beijing's countermeasures targeting the EU's exports of pork, dairy products and wine to China will also hurt EU companies, especially those in Spain, France, the Netherlands and Denmark.

It was under the mounting pressure from Washington to coercing the EU to form a united front against China in trade that the latter has taken these protectionist practices which seriously violate World Trade Organization rules and disrupt the normal international trade order, hindering not just the China-EU trade and investment cooperation but also the EU's green transition, with a negative impact on global climate response.

Although the outcome of Friday's vote was not publicly available, several diplomats told the media how each member state positioned itself. According to European media reports, the 10 EU members voted in favor of the tariffs are Bulgaria, Denmark, Estonia, France, Ireland, Italy, Lithuania, Latvia, the Netherlands and Poland, which account for 45.99 percent of the EU population combined; the five countries that voted against the move were Germany, Hungary, Malta, Slovenia and Slovakia, which account for 22.65 percent of EU population put together.

The remaining 12 EU members, including Spain and Belgium, abstained, which are home to 31.36 percent of EU population combined. The high number of abstentions reflects long-standing qualms about how Europe should deal with trade disputes related to China.

As Beijing said, China firmly opposes the draft final ruling of the EU side, and continue to resolve the issue through negotiations with the EU.

Since late June, technical teams from both sides conducted six rounds of consultations. Over the process, again and again, the Chinese side has fully listened to the demands and opinions of the Chinese and European industries, showing its open and cooperative attitude and exercising maximum flexibility, according to a spokesperson of the Chinese Ministry of Commerce. That momentum should be carried on.

As such, apart from more China-EU talks on the issue, more bilateral efforts are expected to be made between China the several leading supporters of the tariffs, including France, Italy, Poland and the Netherlands — none of which are the major importer of Chinese-made EVs within the EU — in the coming weeks to find mutually acceptable solutions at an early date.

It would have taken opposition from a qualified majority of 15 EU members, representing 65 percent of the EU population, to block the proposal.