The European Union and China are continuing discussions to replace the EU’s recently introduced tariffs on Chinese-made electric vehicles (EVs). While no final agreement has been reached, negotiations remain ongoing.
On Thursday, a spokesperson for China’s Ministry of Commerce stated during a press conference that talks about establishing a minimum price for Chinese EVs in the EU had made progress. The spokesperson emphasized the importance of a “pragmatic and balanced” approach, calling for both sides to address each other’s legitimate concerns and consider the expectations of stakeholders in both regions.
Earlier in the week, Bernd Lange, Chairman of the European Parliament’s trade committee, expressed optimism, saying:
“We are close to an agreement: China could commit to offering e-cars in the EU at a minimum price. This would eliminate the distortion of competition through unfair subsidies, which is why the tariffs were originally introduced.”
However, the European Commission has expressed reservations about such proposals. In September, it rejected a price floor suggested by Chinese EV manufacturers, stating it would neither “eliminate the injurious effects of subsidies” nor “be effectively monitored and enforced.”
The European Commission has raised tariffs on Chinese-made electric cars, which now reach up to 45.3%, effective 30 October. This decision came after multiple reductions to the proposed levies and narrow approval from the EU’s 27 member states. Specific tariffs include a reduction for China-made Teslas to 7.8% from 9%, BYD vehicles at 17%, Geely at 18.8% from 19.3%, and SAIC at 35.3% from 36.3%. Non-cooperative companies face the full 45.3% tariff.
China has retaliated by requiring importers of EU brandy to pay deposits of up to 39% since 11 October. Beijing is also considering raising duties on European gasoline cars with large engines. These measures have rattled European markets. In November, shares of beverage companies like Pernod Ricard SA fell 14%, while LVMH shares dropped by 7%. Major European automakers such as BMW, Porsche, Volkswagen, and Mercedes-Benz have also seen their shares decline by 8% to 12%, with many issuing profit warnings due to slowing demand in China and broader economic challenges.
