The European Commission says that tariffs are necessary to protect EU firms against unfair competition. China says its EV industry has flourished naturally.
The Chinese government said on Friday that it had filed a complaint with the World Trade Organisation over European Union tariffs on electric vehicles made in China.
The Commerce Ministry said that China had resorted to the WTO dispute settlement mechanism “to safeguard the development rights and interests of the electric vehicle industry and cooperation on the global green transformation.”
The EU has imposed provisional tariffs on EVs made in China, in the range of 17.4% to 37.6%.
That is on top of a 10% duty already imposed on Chinese auto imports.
The European Commission maintains that Chinese firms unfairly benefit from government subsidies, allowing them to keep their prices artificially low.
China, meanwhile, says its support for the EV industry conforms with WTO rules, and that the EU ruling “lacks a factual and legal basis”.
The two sides have until early November to try to resolve their differences, after which the provisional tariffs are fixed for a period of five years.
A Commission spokesperson told AFP on Friday: “The EU is carefully studying all the details of this request and will react to the Chinese authorities in due course according to the WTO procedures.”
China’s auto exports rose in July compared with the same month last year, while domestic sales fell, an industry association also reported on Friday.
Risks of an escalating trade war
In its complaint, China’s Commerce Ministry argued that the EU tariffs violate WTO rules and undermine global cooperation on climate change.
Within the EU, some voices have also criticised tariffs on Chinese goods by pointing out that they will make Europe’s green transition more expensive.
This could have a knock-on effect not only on the planet, but also for European jobs with regard to technology deployment.
In response to the EU’s position, China has launched investigations into French cognac exports and European pork in what some analysts fear could develop into a trade war.
Germany, in particular, is concerned about souring relations given the importance of the Chinese market to the German automobile industry.
In an advisory poll in July, a majority of EU member states showed their support for tariffs vis-à-vis Chinese electric vehicles.
Last week, the EU’s trade chief Valdis Dombrovskis told the Financial Times that he expected states to approve the import fees.
