EU‑China tariff talks: Striving for compromise in electric car trade
After the EU announced the introduction of tariffs on Chinese cars, reports emerged of intense negotiations between Brussels and Beijing. Both sides aim to ease trade barriers and are striving to reach a compromise, especially in the context of new electric vehicle models.
The European Commission decided to introduce tariffs on Chinese electric cars in early October. The regulations came into effect at the end of October, sparking a reaction. Reuters revealed that the authorities in Beijing advised Chinese car manufacturers to halt large investments in European countries whose governments supported the imposition of additional EU tariffs on electric vehicles produced in China.
However, the growing trade conflict 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 focusing on simplifying import procedures for new electric vehicle models that have not yet hit the European market. Another crucial element 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 currently considering signing separate agreements with selected Chinese manufacturers, including two companies belonging to 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. Chinese exporters, anticipating changes, significantly increased vehicle deliveries before the new regulations came into effect, allowing them to maintain their current price levels for a while.
In light of 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 developing a new model of cooperation in the automotive sector.
