EU and Chinese officials are discussing alternatives to EU tariffs on Chinese electric cars this week. EU officials said on Monday that there was no prospect of an immediate resolution to the issue.
Bernd Lange, chairman of the European Parliament’s trade committee, hinted to a German broadcaster on Friday that a deal between the 27 countries to replace tariffs between the EU and China with another measure is nearing completion.
However, Reuters reports that EU officials, speaking on condition of anonymity due to the sensitive nature of the negotiations with Beijing, refuted this claim. They clarified that while discussions are ongoing, significant obstacles remain, preventing a deal from being finalized.
Negotiations were preceded by Xi Jinping’s conversation with German Chancellor Olaf Scholz. During the G20 meeting in Rio de Janeiro, President Xi Jinping urged Scholz to facilitate the resolution of the EU’s tariffs on Chinese electric vehicles, as reported by state television CCTV.
In early October, The EU green-lit significant tariffs on imports of Chinese electric vehicles after receiving broad support from member states. These tariffs are expected to increase from the current 10% to as much as 45% over the next five years. The European Commission, which conducted the vote, emphasized that the EU and China would “work hard to explore an alternative solution” to the tariffs. In response, China’s Commerce Ministry denounced the decision as “unfair” and “unreasonable,” but acknowledged the possibility of resolving the issue through negotiations.
EU member states were divided on imposing tariffs on Chinese electric vehicles. Germany, whose automotive industry relies heavily on exports to China, opposed the tariffs. Many EU members abstained from the vote. However, France, Italy, the Netherlands, and Poland supported the import taxes. The proposal for tariffs could only have been blocked if a qualified majority of 15 member states had voted against it.
Amidst the escalating trade tension between the two blocs, there are calls for cooperation on the Chinese side. Chinese Foreign Minister Wang Yi highlighted on Monday that China and the European Union should see each other as partners rather than adversaries. He encouraged both sides to think from each other’s perspective and seek partnership.
Despite efforts on both sides, it is clear that EU measures against China will not be limited to import tax increases in certain sectors. As of Monday, it became known that the EU is set to sanction several Chinese firms alleged to have assisted Russian companies in developing attack drones used in Ukraine.
