In the dispute over state subsidies for electric cars, the Chinese government is defending itself at the World Trade Organization (WTO) against punitive tariffs from the European Union on electric cars from the People’s Republic. On Friday, Beijing appealed to the WTO’s dispute settlement mechanism, the Chinese Ministry of Commerce said. The EU decision violates the rules of the World Trade Organization and undermines “global cooperation in combating climate change”.
The Ministry of Commerce in Beijing called on the EU to “immediately correct its wrong practices” and “jointly promote the stability of economic and trade cooperation” between China and the European Union as well as maintaining the stability of the industrial and supply chains for electric vehicles.
The At the beginning of July, the EU provisionally imposed additional import duties on electric cars from China. Depending on the manufacturer, the new duties are between 17.4 and 37.6 percent and are in addition to the 10 percent import duty that already applies. Because the final decision is still pending, companies do not initially have to pay the new tariffs, but they do have to provide appropriate guarantees when importing the cars.
Brussels: China is distorting the market with subsidies
With the punitive tariffs, Brussels said it was reacting to market-distorting state subsidies for Chinese companies at the expense of European manufacturers. A final decision should be made by the beginning of November so that negotiations with China can continue until then. The federal government and the German auto industry are hoping for a negotiated solution.
For Brussels, the punitive tariffs are a delicate balancing act as the Commission seeks to protect Europe’s important auto industry and orient it towards green growth, while at the same time avoiding a too obvious confrontation with Beijing. The EU also followed suit with the step taken at the beginning of July USA, which in turn announced an increase in tariffs on Chinese electric vehicles in mid-May from 25 to 100 percent. This fueled fears that Chinese exports to the EU could increase noticeably as a result.
According to the US think tank Atlantic Council, sales of Chinese electric vehicles abroad rose by 70 percent last year alone and reached a value of 34.1 billion dollars (around 31.2 billion euros). Almost 40 percent of them went to the EU.
The World Trade Organization WTO, based in Geneva, is part of the International Monetary Fund (IMF) and the World Bank are among the most important international organizations in economic policy. On the one hand, it is intended to provide a forum for negotiations to reduce tariffs and other trade barriers and, on the other hand, to monitor whether international trade rules are being adhered to. However, attempts to resolve conflicts between WTO member states before the Dispute Settlement Body (DSB) are often considered lengthy.