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Written by Joe Cash and Ryan Wu
BEIJING (Reuters) – Beijing wants the European Union to scrap its initial tariffs on Chinese electric cars by July 4 after the two sides agreed to hold new trade talks, state-controlled newspaper Global Times reported.
Temporary EU duties of up to 38.1% on imported Chinese-made electric vehicles are set to begin applying by July 4 while the bloc investigates what the EU claims are excessive and unfair subsidies to Chinese electric vehicle makers.
China has repeatedly called on the European Union to cancel its customs tariffs, expressing its readiness to negotiate. Beijing does not want to get involved in another tariff war, and is still suffering from US tariffs on its goods imposed by the Trump administration, but says it will take all steps to protect Chinese companies if this happens.
The two sides agreed to resume tariff talks after a phone call between EU Commissioner Valdis Dombrovskis and Chinese Trade Minister Wang Wentao on Saturday during the German Economy Minister’s visit to China, who said the doors for discussion were “open.”
The best outcome of the talks is for the EU to abandon its tariff decision before the Fourth of July, the Global Times reported late Sunday, citing observers.
The newspaper said that the European Union’s increasing protectionist moves will lead to countermeasures from China, and the escalation of trade frictions will only lead to “lose-lose” results.
The tariffs are due to be finalized on November 2 at the end of the EU anti-subsidy investigation.
The Chinese Ministry of Commerce did not immediately respond to a Reuters request for comment.
Trade war?
EU trade policy has turned increasingly precautionary over concerns that China’s production-focused development model could lead to it being flooded with cheap goods as Chinese companies look to increase exports amid weak domestic demand.
China has rejected accusations of providing unfair subsidies or having an overcapacity problem, saying the development of China’s electric vehicle industry was the result of advantages in technology, market and industrial supply chains.
“When European Commission President von der Leyen announced that she would investigate new energy vehicles in China… I had an intuitive feeling that it was not only an economic issue, but also a geopolitical issue,” said Zhang Yansheng, a senior researcher at the China Energy Center. International economic exchanges.
“Personally, I think it is unfair to start a tariff war by only taking into account the capacity utilization rate and insufficient demand,” he added.
Trade relations between the 27-nation bloc and the world’s second-largest economy took a sudden turn for the worse when the European Parliament voted in May 2021 to freeze ratification of what would have been a landmark investment treaty due to tit-for-tat sanctions. Due to allegations of human rights violations in the Xinjiang region of China.
Disagreements between Beijing and Brussels erupted again that year when China downgraded its diplomatic relations with Lithuania and asked multinational companies to sever ties with the Baltic state after Vilnius called on democratically ruled Taiwan, which China claims as part of its territory, to open a representative office in the capital. . .
Armed and ready
Although Beijing called for talks, it also indicated that it had retaliatory measures ready if the Commission did not back down, and that it considered Brussels entirely responsible for the escalating tensions.
The Global Times, which first reported that China was considering opening a reciprocal anti-dumping investigation into European pork imports – which the Commerce Ministry announced last week it would conduct – had also promoted an anti-subsidy investigation into European dairy products. Goods and tariffs on gasoline cars with large engines.
Chinese authorities have dropped hints about possible retaliatory measures through state media comments and interviews with industry figures.
“Beijing seems likely to raise tariffs by up to 25% on European-made cars with engines of 2.5 liters or more,” said Jacob Gunter, a senior analyst at the Berlin-based Merics Institute for China Studies.
“Pork and dairy products are already on Beijing’s table, and more agricultural products are likely to be threatened,” he added. “On the EU side, there are a variety of investigations underway using the new toolkit assembled by Brussels, so we should expect some kind of action targeting distortions in (Chinese) products ranging from medical devices to security scanners at airports to steel pipes.” .
