TMTPost --  China urges the European Union to take Chinese concerns seriously in negotiations over the anti-subsidy duties on electric vehicles (EVs) while signaling the trade dispute could escalate with retaliatory tariffs.

Credit：Xinhua News Agency

China is studying increasing tariffs on imported fuel-powered vehicles with large-displacement engines, and will make a decision prudently after comprehensive consideration of various factors, said He Yadong, a spokesperson of the Ministry of Commerce of China (MOFCOM) at a press conference Thursday.

At the press, He cautioned the EU not to undermine Chinese efforts to settle the dispute over punitive tariffs on EV imports from China. In response to a question on negotiations between China and the EU on EV tariffs, the spokesperson stressed that China has demonstrated utmost sincerity and flexibility, and the two sides have made important progress in certain areas. “However, significant differences remain at this stage of the negotiation process, as the EU has failed to actively respond to the core concerns of both Chinese and European industries,” He said.

China has formally invited the EU to send a technical team to China as soon as possible for the next phase of in-person consultations, said the spokesperson, adding that China has made all necessary preparations and is awaiting a response from the EU side.

The ministry's warning came as the Global Times cited sources earlier this week that the EU has resorted to tactics that may have undermined the talks with unreasonable demands, not responding positively to sensible offers from the Chinese side and attempting to split up Chinese EV producers in negotiations. Among the many examples of the EU's insufficient sincerity, EU officials sought to conduct separate negotiations with different EV makers, while failing to respond positively to offers made by the Chinese negotiating team, with the China Chamber of Commerce for Import and Export of Machinery and Electric Products (CCCME) representing the whole Chinese EV industry, reported the state-backed Chinese newspaper.

The European Commission disclosed on October 4 its proposal to impose definitive countervailing duties on imports of battery electric vehicles (BEVs) from China has obtained the necessary support from EU Member States for the adoption of tariffs. The announcement cleared hurdles for the EU to introduce up to 45% definitive tariffs following an anti-subsidy investigation. Since a qualified majority of 15 EU members  completed, the proposed definitive tariffs are set to go into effect from next month for five years.

Days after the Commission’s disclosure, China’s commerce ministry, the MOFCOM, last week announced it will impose temporary anti-dumping measures on brandy originating in the EU under the World Trade Organization (WTO) rules and the country’s laws and regulations. Effective from last Friday, importers of brandy originating in the EU must place deposits with Chinese customs based on dumping margins of between 30.6% and 39%. The ministry said found the domestic brandy industry is under substantial threat of damage, and there is a causal relationship between the dumping and the substantial threat of damage.

The MOFCOM also suggested it could further hit back at the EU. A spokesperson of the ministry said Chinese authorities are conducting investigations into EU pork and dairy to fully protect the rights of all stakeholders, and will make objective and fair ruling based on the results of the investigations.  In the meantime, China is working on other measures such as raising tariffs on imported large-displacement fuel vehicles, the spokesperson added.