China files complaint with WTO over EU’s EV tariffs – ‘lacks factual, legal foundation; violates WTO rules’

China files complaint with WTO over EU’s EV tariffs – ‘lacks factual, legal foundation; violates WTO rules’

China has lodged a complaint with the World Trade Organization (WTO) over the European Union’s tariffs on Chinese-made electric vehicles. The tariffs of up to 45% would instantly make Chinese EVs more expensive, cancelling out the price advantage they had in the market.

Bringing the issue to WTO’s dispute settlement mechanism on November 4 is a formal move to ‘safeguard the development interests’ of the EV industry, according to a statement from China’s ministry of commerce. It reiterated its strong opposition against EU’s tariffs, describing the levies as ‘trade protectionism in the name of countervailing.’

According to Bloomberg, China’s complaint raises the risk of greater tit-for-tat confrontation in a relationship valued at 739 billion euros in bilateral merchandise trade in 2023. The European bloc has defended the tariffs, saying it’s a byproduct of an investigation of Chinese government subsidies that unfairly benefit the EV sector.

China files complaint with WTO over EU’s EV tariffs – ‘lacks factual, legal foundation; violates WTO rules’

“China believes the EU’s final ruling on anti-subsidy measures lacks factual and legal foundation, violates the WTO rules and is an abuse of trade remedy measures. We urge the EU to face its mistakes and immediately correct its illegal practices, and to jointly maintain the stability of the global EV supply chain and China-EU economic and trade cooperation,” a ministry spokesperson said in the statement.

Last week, the EU published the regulation introducing the tariffs of up to 45% on Chinese EV imports – which have been in effect provisionally since July – in its official journal. This comes after months of negotiations, threats of retaliation by China – a huge market for German auto companies – and auto-industry lobbying (German carmakers are strongly against the tariffs, for instance).

The European bloc and its second largest goods-trading partner have had discussions aimed at seeking alternative solutions even after the tariffs take effect, but unsurprisingly, those talks have so far failed to yield any result.

China files complaint with WTO over EU’s EV tariffs – ‘lacks factual, legal foundation; violates WTO rules’

Bloomberg reported last week that the EU will be sending officials to Beijing to hold more talks. They are exploring whether an agreement can be reached on so-called price undertakings, which is a complex mechanism to control prices and volumes of exports, used to avoid tariffs. However, both Brussels and Beijing have indicated that the differences remain significant.

Since EU’s issue with Chinese EVs is state subsidy, its tariff rates differ according to brand, depending on the level of state support. For BYD, it is 17%, Geely gets 18.8% and it’s 35.3% for state-owned SAIC, for instance. When factored in, the EU’s standard 10% vehicle import duty pushes tariffs to 27%, 28.8% amd 45.3% respectively for the three Chinese automakers.

According to the European Commission, which oversees EU trade policy, the extra tariffs are required to counter what it says are unfair government subsidies granted by the Chinese government to domestic automakers, enabling them to undercut rivals in Europe on price.

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Danny Tan

Danny Tan loves driving as much as he loves a certain herbal meat soup, and sweet engine music as much as drum beats. He has been in the auto industry since 2006, previously filling the pages of two motoring magazines before joining this website. Enjoys detailing the experience more than the technical details.

 

Comments

  • Red Bean Army on Nov 05, 2024 at 12:34 pm

    Haha like how they filed a “complaint” to the WHO to stop referring as the Wuhan virus, use bs code name covid-19 instead. Thick skinned clowns.

    Like or Dislike: Thumb up 3 Thumb down 16
    • Pro-Palestine on Nov 07, 2024 at 9:23 am

      Only Indians will believe Covid originated from Wuhan. Every race does not have the same level of intelligence by birth

      Like or Dislike: Thumb up 1 Thumb down 0
  • Patriot on Nov 05, 2024 at 12:39 pm

    Sokong..agen2 ccp tempatan taat setia kekeke

    Like or Dislike: Thumb up 0 Thumb down 12
  • President Xi on Nov 05, 2024 at 12:47 pm

    MUMMYYYY……..

    Like or Dislike: Thumb up 3 Thumb down 3
  • UThant on Nov 05, 2024 at 1:05 pm

    Eh, after sponsored the UEFA Euro 2024, now kena ni..?

    Like or Dislike: Thumb up 1 Thumb down 2
  • James KWON on Nov 05, 2024 at 4:24 pm

    China does not have any respect for WTO regulations in Chinese market. they copy, steal the IPs and designs. do all they want and no one can do anything because they need the large car market. now that they already dumped their cars in ASEAN and Middle East, want to dump the rest in Europe. Hov say no and they complain. stop the subsidies and let the OEMs grow themselves.

    Like or Dislike: Thumb up 2 Thumb down 5
    • Sound like it can be used here as well. Stop the help and let them grow themselves.

      Like or Dislike: Thumb up 0 Thumb down 0
    • Autodriver on Nov 06, 2024 at 8:28 am

      Your comment is dumb. Chinese gov subsidies for their OEM and carmaker for domestic market make sense, because benefit end up is going for their own citizen. How on earth the Chinese gov wanna subsidize on carmaker who sell to overseas market which this benefit is for “foreigner”. All countries gov income mostly from tax, do you think Chinese gov collecting tax income from their own citizen and funding to “foreigners in foreign country”? And when EU impose tariff on the EV, they are not penalizing Chinese EV but also their own citizen. Those who still willing to buy Chinese EV with high tariff they will end up paying more tax to their own gov. Let’s see how many people so patriotic to buy their own local brands which lower quality and tech. In EV industry only Tesla and Chinese carmakers are relevant, all others are lacking behind by far. Tesla has the most advance tech on self-driving and energy efficiency, while Chinese carmakers have advantages on cheaper price yet high quality interior and safer battery option.

      Like or Dislike: Thumb up 2 Thumb down 0
  • ROTI CANAI on Nov 05, 2024 at 6:59 pm

    boikot europe. sokong anti yahudi.

    Like or Dislike: Thumb up 1 Thumb down 0
  • Trump on Nov 07, 2024 at 9:21 am

    We will impose 100% Tariff on Europe soon. Hahahaha

    Like or Dislike: Thumb up 0 Thumb down 0
 

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