China asks EU to remove EV tariffs

China has requested that the EU remove its provisional tariffs of up to 38.1% on Chinese electric vehicles (EVs) by today.

The European Commission is concerned about excessively high Chinese subsidies that may hurt European auto manufacturers. In late June, China’s Commerce Ministry and Germany’s economy minister agreed to hold further trade talks, but it is clear that in order for the EU to reconsider its decision, China will need to make significant concessions. The EU is not alone in its concern, with countries such as Canada currently standing among those that are considering adopting Chinese EV tariffs.

It is highly unlikely that the EU will alter the provisional tariffs today as member states would need to vote with a qualified majority against the Commission. Talks will likely continue until November 2, at which time the EU will wrap up the anti-subsidy investigation and the tariffs will be finalized. In the short term, China may take retaliatory measures against the EU. That said, the tariff could potentially prove to be beneficial for China in the long term. China has already begun to amp up its EV exports to other markets such as Africa and Latin America, thus strengthening its political influence in those arenas, and EV tariffs from the EU and Canada will only push China to further solidify its dominance.