Into the dispute between China and the EU about planned European import tariffs for Chinese electric cars is moving. Both sides want to start discussions about this, as the Ministry of Commerce in Beijing and Federal Economics Minister Robert Habeck (54) announced during his visit to Shanghai on Saturday. The Chinese ministry said the talks would be led by Chinese Trade Minister Wang Wentao (60) and EU Trade Commissioner Valdis Dombrovskis (52). Wang was invited to a video conference.
Habeck said that Dombrovskis had informed him “that there should now be concrete negotiations. This is new and surprising in that it has not been possible to enter into a concrete negotiation timetable in the last few weeks.” The Vice Chancellor expressed cautious confidence. “This is a first step and many more will be necessary.”
The additional tariffs of up to 38.1 percent are to be levied from July 4th. The EU Commission wants to continue its review until November 2nd and then set final rates, usually for five years. The Commission justified the move with distortions of competition caused by Chinese state subsidies. She named the manufacturers as beneficiaries BYD, Geely and Saic. The tariffs would also affect western car manufacturers such as Tesla and BMW meet people who deliver cars produced in China to Europe. In addition, the German auto industry rejects the EU project for fear of Chinese retaliation.
A spokesman for the EU Commission described the upcoming talks between the two parties as “open and constructive”. The EU emphasized that a negotiation result must in any case be effective against harmful subsidies. Negotiations will continue at all levels in the coming weeks.
Habeck said he had the impression that his messages were getting through more and more throughout the day. When asked about his possible role, he said he had done what one had to do as German economics minister in the situation. “And whether it was a contribution and how much of a contribution it might have been is for others to judge.”
Habeck sees an opportunity to compromise
Habeck had previously emphasized that these were not flat-rate punitive tariffs, but rather tariffs to compensate for unfair competitive advantages. He does not criticize the fact that China produces significantly more goods than it consumes. “Overcapacity is not the problem and not the accusation” – and neither are subsidies. The problem arises when government funding flows to increase export opportunities.
Regarding possible compromises in the upcoming negotiations, Habeck said in the evening: “I see some, also in the field of electric mobility.” But now China has to make proposals and the EU Commission has to lead the negotiations.
The EU Commission has been investigating since last autumn whether electric cars in China benefit from subsidies that distort competition. According to Commission data, Chinese electric cars are typically around 20 percent cheaper than models manufactured in the EU.
Almost two weeks ago, the Commission came to the preliminary conclusion that the value chain for battery-powered electric vehicles (BEVs) in China benefits from unfair subsidies. That’s why the Commission threatened additional tariffs of between 20 and almost 40 percent. To date, tariffs of ten percent have been levied.
Brussels’ move followed similar measures by the USA. In mid-April, the US government imposed special tariffs on electric cars, semiconductors, solar cells, cranes and other products from China.