EU-China negotiations to continue after 4 October electric vehicle vote

Member states will vote on Friday (4 October) whether to definitively impose duties on China-made electric vehicles (EVs), but the European Commission and Beijing will continue efforts to solve the long-running trade dispute even after the poll is conducted, a person familiar with the matter told Euractiv.

The vote – originally scheduled for 25 September – was delayed to give Chinese and EU officials time to negotiate an alternative solution to the imposition of tariffs, whereby Chinese carmakers, including SAIC, Geely, and BYD, agree to offset their lucrative state subsidies by selling their EVs for a minimum price.

The source said that the Commission’s proposal, sent to member states late on Friday (27 September), includes a legal preamble stating that no diplomatic compromise has yet been reached but that negotiations will continue after the vote.

The person added that the proposed duties are the same as those disclosed by the Commission in mid-August – meaning that the duties would range up to 36.3%, on top of the EU’s standard 10% car import levy.

Fifteen of the EU’s 27 member states, representing at least 65% of the union’s population, must vote against the tariffs to prevent them from being introduced for a five-year period.

Only four EU countries – Cyprus, Malta, Hungary, and Slovakia – voted against the proposed duties in a non-binding vote held in July.

However, Spain, which originally voted in favour of the tariffs, has since strongly indicated that it will now vote against them, and several other member states are yet to decide how they will vote.

During a visit to Brussels last week, Sweden’s Trade Minister, Benjamin Dousa, said that Stockholm is currently “working on” its final position. Sweden, whose flagship carmaker, Volvo, is owned by Geely, abstained in July.

Another source familiar with the matter also told Euractiv that the Commission wrongly interpreted Czechia as favouring the duties in July.

The source explained that Prague has consistently refused to take any position – including abstention – on the year-long trade dispute. The Commission’s misconstrual of Czechia’s thinking considerably strained relations between Prague and Brussels, they added.

Thawing tensions?

The upcoming vote follows the EU’s decision last week to file an official complaint with the World Trade Organisation (WTO) over China’s retaliatory anti-dumping probe into EU dairy products.

The move escalated tensions that had appeared to thaw following a meeting several days earlier between Chinese Commerce Minister Wang Wentao and Trade Commissioner Valdis Dombrovskis, where the two sides vowed to take “a renewed look” at so-called price undertakings.

The Commission had rejected a previous price offer and had said just days before the meeting that the deadline for issuing further offers had passed.

The EV probe was announced by Commission President Ursula von der Leyen in her State of the Union address in September last year. It has prompted retaliatory anti-subsidy probes by Beijing into EU imports of brandy, pork, and dairy.

Last month, China also filed an official complaint with the WTO about the Commission’s EV probe, alleging that the investigation “lacks a factual and legal basis” and “seriously violates” the trade body’s rules.

Brussels has stated that 30 October is the “absolute deadline” for the definitive imposition of the duties.

[Edited by Alice Taylor-Braçe]