EU-China, improvement in electric car import tariffs from Beijing. But Brussels clarifies: “No agreement”

Brussels – Something is happening on the electric car front between the European Union and China. More than a year after the imposition of EU tariffs of up to 35 per cent on imports of e-cars from Beijing, the European Commission has today published guidelines to ensure that Chinese manufacturers can submit adequate price commitment offers. The Chinese Ministry of Commerce immediately hailed the document as the end of the dispute, while Brussels clarified: “It provides guidance, nothing more.” 

The guidance document covers “various aspects to be addressed in a possible undertaking offer, including the minimum import price, sales channels, cross-compensation and future investments in the EU,” according to a statement from the EU executive. European Commission Trade Spokesperson Olof Gill clarified that the guidelines were drafted following a price undertaking offer received last December from a Chinese car manufacturer. “We felt that the time had come to issue this additional guidance so that any further undertaking offers, should they arrive, would have a very clear framework within which they must be formulated,” the spokesperson said. 

Although Gill himself confirmed the dialogue with the Ministry of Commerce of the People’s Republic on the issue, the interpretation offered this morning by Beijing goes well beyond Brussels’ openness. “China and the EU have conducted several rounds of consultations in a spirit of mutual respect,” the Chinese Ministry of Commerce announced in a statement. Both sides believe it is necessary to provide general guidance on price commitments for Chinese exporters of battery electric passenger vehicles (BEVs) to the EU, enabling them to address relevant issues in a more practical, targeted, and consistent manner with World Trade Organisation (WTO) rules.” 

For Beijing, “the progress made fully reflects the spirit of dialogue and the results of the consultations” and “demonstrates that both China and the EU have the ability and willingness to properly resolve differences through dialogue and consultation within the framework of WTO rules and to maintain the stability of the automotive industry and supply chains in China, the EU, and around the world”. 

There has been no actual agreement to freeze the countervailing duties imposed by the European Commission on 28 October 2024, following an anti-subsidy investigation. The extra tariffs on Chinese battery-powered four-wheelers remain in force. They vary depending on the brand and are added to the basic rate of 10 per cent: Saic is the most affected (35.3 per cent), followed by Geely (18.8 per cent), Byd (17 per cent) and Tesla (7.8 per cent), the latter included because part of its production takes place in Shanghai. 

“The European market is open to electric vehicles from all other parts of the world, if there is a level playing field,” Gill clarified, insisting that the Commission’s goal is to “address unfair competitive advantage.” With the new guidelines, the EU executive sets the parameters for approving any price commitments from Chinese manufacturers and abolishing the corresponding duties. Brussels has specified that “any price commitment offer is subject to the same legal criteria and the European Commission will conduct each assessment in an objective and fair manner, following the principle of non-discrimination and in accordance with WTO rules.”