EV Tariffs Row Escalates as China Challenges EU Duties at WTO

China has filed a formal complaint at the World Trade Organization (WTO), challenging the European Union’s decision to impose provisional anti-subsidy tariffs on imports of China-made electric vehicles.

The EU launched in October 2023 anti-subsidy investigations into EU imports of EVs from China to determine whether the value chains in China benefit from illegal subsidies.  

In June, the European Commission “provisionally concluded that the battery electric vehicles (BEV) value chain in China benefits from unfair subsidization, which is causing a threat of economic injury to EU BEV producers."

The provisional import tariffs – which come on top of an existing 10% duty – were imposed as of July 5 and are for a maximum duration of four months.

This autumn, the EU is expected to decide whether the provisional duties – of up to 38% depending on the brand and whether it has been sampled in the EU investigation – would become permanent.

The EU tariffs, however, have escalated trade frictions, with China opening anti-dumping investigations of EU imports, targeting brandy and pork imports from the bloc.

Now China is taking the EU to the WTO over the EV import tariffs.

China has filed a complaint seeking a ruling under the WTO’s dispute settlement mechanism on Friday, China’s Commerce Ministry said in a statement carried by Bloomberg.

With the complaint, China seeks to “safeguard the development rights and interests” of the EV industry, Beijing said.

“We urge the EU to immediately correct its wrongdoing, and together safeguard China-EU economic and trade cooperation as well as the stability of EV supply chain,” a spokesperson for the Chinese Commerce Ministry said.

The EU member states are split on the provisional tariffs on imports of Chinese electric vehicles, as many governments seek to avoid a trade war with China and protect the profits of their biggest auto manufacturers. 

The industry has also criticized the tariffs.

VDA, Germany’s automakers’ association, has said that the “stated goal of ensuring fair competition conditions and protecting the domestic industry from unfair practices will not be achieved” by the anti-subsidy tariffs.

“The European anti-subsidy tariffs would not only affect Chinese manufacturers but also European companies and their joint ventures in particular,” VDA added.

By Tsvetana Paraskova for Oilprice.com

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