[Salon] China seeks WTO talks over EU’s EV tariffs, says trade rules ‘severely’ violated

[Chas Freeman <cwfresidence@gmail.com>]

https://www.scmp.com/economy/global-economy/article/3273903/china-seeks-wto-talks-over-eu-tariffs-chinese-evs-severely-violate-trade-rules?module=top_story&pgtype=homepage

China seeks WTO talks over EU’s EV tariffs, says trade rules ‘severely’ violated

9 Aug 2024

Employees work on the production line at a factory for Chery’s electric vehicles in Wuhu, Anhui province. Photo: Reuters

Trade frictions between China and the European Union escalated on Friday, as Beijing announced its decision to take the bloc’s import tariffs on Chinese electric vehicles (EVs) to the World Trade Organization (WTO) for arbitration.

In an online statement, a Ministry of Commerce spokesman said China had filed a lawsuit against the EU at the intergovernmental organisation over its preliminary ruling announced in early July.

“The EU’s preliminary ruling lacks factual and legal basis, seriously violates WTO rules, and undermines global cooperation in addressing climate change,” the spokesman said.

“We urge the EU to immediately correct its wrongdoing and join hands to safeguard bilateral economic and trade cooperation, as well as the stability of EV industrial chains.”

The move by China came after the EU’s additional duties of up to a revised 37.6 per cent on Chinese-battery electric vehicles took effect on July 5 and would initially last for a maximum of four months.

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Chinese-made electric vehicles face additional EU import tariffs of up to 38%

Previously, both sides said the matter was still being negotiated, with a final verdict expected in four months.

Wang Yiwei, director of the Centre for European Studies at Renmin University of China and a Jean Monnet Chair professor, said the commerce ministry’s move could be a sign the talks with the EU may not be going well and would not be sufficient to resolve the EV subsidy issue.

“The EU has said it is too late to talk, as the bloc faces internal pressure to stem the arrival of Chinese EVs,” Wang said. “Its choice to enact punitive measures is like a decision cast in stone.”

He added that getting the WTO involved could be a tactic to influence some enterprises and business chambers within the EU, since not all member states have resolved to act against Chinese EVs.

“More time is needed for the talks between China and the EU, and for EU member states to assess the issue and the ramifications of the EU’s measures.”

Jorge Toledo, the EU ambassador to China, said last month that Beijing had only recently responded to the EU’s tariffs after the bloc had requested consultation for months – a claim the ministry refuted.

Wang warned that the WTO’s process to resolve trade disputes is a long and complicated one.

“But China has proof the EU’s previous probe of Chinese EV manufacturers could have violated WTO rules or standards, as some EV firms complained about being asked by the EU to provide sensitive information,” he added. “China is using the WTO platform to uphold the interests of its EV sector.”

In the aftermath of Brussels’ initial tariff decision, China announced an anti-dumping investigation into certain pork products imported from the bloc on June 17.

China also began a trade-and-investment-barrier investigation on July 10, examining how the EU’s Foreign Subsidy Regulation had affected Chinese companies.