The risk of rising Chinese electric car prices in the EU might be decreasing after both sides agreed to negotiate planned import taxes.
Top officials from both regions discussed the tariffs in a call on Saturday and agreed to further negotiations, despite ongoing frictions.
This call marks the first instance of negotiation since the EU threatened China with electric vehicle (EV) tariffs of up to 38%.
The EU claimed Chinese EVs were unfairly subsidized by the Chinese government. In response, China accused the EU of protectionism and violating trade rules.
An EU spokesperson told the BBC the call between Trade Commissioner Valdis Dombrovskis and his Chinese counterpart Wang Wentao was “candid and constructive.” They added that both sides would “continue to engage at all levels in the coming weeks.”
However, the spokesperson reiterated the EU’s opposition to the funding of the Chinese EV industry, stating that “any negotiated outcome” to the proposed tariffs must address the “injurious subsidization” of Chinese EVs.
China issued a similar statement on Saturday, maintaining its disagreement with the EU.
Additionally, Mr. Wang met with German Vice-Chancellor and Federal Minister for Economic Affairs and Climate Action Robert Habeck on Saturday.
In a Facebook post about the meeting, China’s Ministry of Commerce said it had told Mr Habeck about its “firm opposition” to the tariffs.
It reiterated its threat to file a lawsuit with the World Trade Organization (WTO) “to firmly defend its legitimate rights and interests.”
Germany has also voiced criticism of the tariffs.
When the EU initially proposed them last week after its investigation of Chinese EVs within the trading bloc, Germany’s Transport Minister, Volker Wissing, cautioned that the move risked sparking a “trade war” with Beijing.
“The European Commission’s punitive tariffs hit German companies and their top products,” he wrote on X, formerly known as Twitter, at the time.
The European car industry has also voiced criticism.
Stellantis, the conglomerate that owns Citroën, Peugeot, Vauxhall, Fiat, and several other brands, stated that it does not endorse measures that “contribute to the fragmentation of world trade.”
The proposed tariffs vary from 17.4% to 38.1%, depending on the brand and the extent of their cooperation with the EU’s investigation.
These tariffs would be imposed on top of the current 10% rate applied to all electric cars manufactured in China.
The EU’s intervention follows a much bolder move by the US.