Chinese EV tariffs: China is pressing the European Union to withdraw its provisional tariffs on Chinese electric vehicles (EVs) before July 4, according to state-controlled Global Times. This appeal follows both parties agreeing to initiate new trade discussions.

The EU plans to impose duties of up to 38.1 per cent on imported Chinese EVs while it investigates claims of excessive subsidies. China has repeatedly urged the EU to cancel these tariffs and expressed readiness to negotiate, avoiding another trade conflict reminiscent of the US tariffs imposed during the Trump administration.

The decision to renew talks came after a call between EU Commissioner Valdis Dombrovskis and China's Commerce Minister, coinciding with a visit to China by Germany's economy minister, who confirmed that discussions are underway.

China's Global Times reported that the optimal outcome would be for the EU to drop its tariff plans before the July deadline. However, analysts and EU trade groups stressed that any resolution would require significant concessions from China.

Alicia Garcia Herrero, a senior fellow at the Bruegel think tank, noted that it is unlikely the EU will reverse its decision before the French elections. "The Commission can't change a decision it has been considering for months," she added.

The tariffs are set to be finalised on November 2, pending the outcome of the EU’s anti-subsidy investigation. The EU has stressed that any agreement must effectively address the concerns over subsidisation.

China's commerce ministry has not yet commented on the matter.

The head of Germany's largest industry association, Siegfried Russwurm, welcomed the renewed talks, stating that dialogue is preferable to conflict. Russwurm, also chairman of Thyssenkrupp, shared that tariffs would be detrimental to Germany’s export-driven economy.

Maximilian Butek of the German Chamber of Commerce in China expressed scepticism about the tariffs being lifted unless China resolves the issues flagged by the European Commission.

The EU’s protective trade policies reflect concerns over China's production model and potential market flooding with cheap goods amid weak domestic demand. China maintains that its EV industry benefits from technological and market advantages rather than unfair subsidies.

Trade relations between the EU and China have deteriorated since May 2021, following the European Parliament's decision to freeze a landmark investment treaty due to sanctions over alleged human rights abuses in Xinjiang.

While Beijing is calling for negotiations, it has hinted at retaliatory measures if the EU proceeds with the tariffs, including potential investigations into European pork and dairy imports and tariffs on large-engined petrol cars.

(with Reuters inputs)

China urges EU to cancel EV tariffs amid trade talks

The tariffs are set to be finalised on November 2, pending the outcome of the EU’s anti-subsidy investigation.

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