EU and China seek truce in electric car tariff dispute
After the EU announced introducing tariffs on Chinese cars, reports emerged of intense negotiations between Brussels and Beijing. Both sides aim to ease trade barriers and reach a compromise, particularly regarding new electric vehicle models.
The European Commission decided to introduce tariffs on Chinese electric cars in early October. These regulations took effect at the end of October, sparking a reaction, as the authorities in Beijing advised Chinese car manufacturers to halt significant investments in European countries that supported additional EU tariffs on electric vehicles produced in China, Reuters revealed.
The growing trade war between the EU and China may ease. The union is still in talks with China and sees progress in negotiations with Chinese partners. Negotiators are concentrating on simplifying import procedures for new electric vehicle models unavailable in the European market. An essential aspect of the discussions is the possibility of offsetting minimum prices through the trade of hybrid vehicles.
The position of the Chinese side
The government in Beijing presented a proposal involving twelve exporters, including leading manufacturers such as SAIC Motor Corp., BMW Brilliance Motor Corp., and Zhejiang Geely Automobile Co., the owner of the Volvo brand. The Chinese authorities oppose individual agreements between manufacturers and Brussels, aiming for a comprehensive trade agreement with the European Union.
However, the European Commission maintains that individual agreements align with World Trade Organization rules. Brussels is considering signing separate agreements with selected Chinese manufacturers, including two companies in the Geely group. Such a solution would mean suspending tariffs for these specific firms.
Consequences of the new regulations
Currently, car imports from China are subject to additional 35-percent tariffs, supplementing the previously established 10-percent charges. In anticipation of changes, Chinese exporters significantly increased vehicle deliveries before the new regulations took effect, allowing them to temporarily maintain their current price levels.
In response to the new tariff regulations, Chinese exporters are actively seeking solutions to maintain competitiveness in the European automotive market. Ongoing negotiations between the European Union and China may lead to the development of a new automotive sector cooperation model.
