China appeals to WTO over EU tariffs on electric vehicles

LONDON — China has filed a complaint with the World Trade Organization (WTO) over the European Union’s final tariffs on Chinese electric vehicle (EV) imports, escalating a dispute that is straining an already rocky relationship.

Beijing referred the case to the WTO’s dispute settlement mechanism on November 4 to “protect the development interests” of the electric vehicle industry, according to a statement from the Commerce Ministry. The ministry reiterated its strong opposition to the EU tariffs, criticizing the charges as “trade protectionism in the name of counteraction”.

China’s official complaint raises the risk of increased confrontation in bilateral trade in goods worth €739 billion (S$1.06 billion) in 2023. The bloc has defended the tariffs, saying they are a byproduct of an investigation into Chinese government subsidies that unfairly benefit the sector.

“China believes that the EU’s final decision on anti-subsidy measures has no factual and legal basis, violates WTO rules and is an abuse of trade protection measures,” a ministry spokesman said in a statement. “We call on the EU to admit its mistakes and immediately correct its illegal practices, and jointly support the stability of the global electric vehicle supply chain and China-EU economic and trade cooperation.”

After months of negotiations, threats of retaliation and lobbying by the auto industry, the EU last week published a ruling in its official journal imposing tariffs of up to 45 percent on imports of Chinese electric vehicles, temporarily in place since July.

The EU and its second goods trading partner have held discussions aimed at finding alternative solutions even after the tariffs took effect, but these talks have so far failed to produce a breakthrough.

The bloc decided to send officials to Beijing for more talks, Bloomberg reported last week. The two sides are exploring the possibility of reaching an agreement on so-called price commitments, a complex mechanism to control prices and export volumes used to avoid tariffs. Both Brussels and Beijing indicated that the differences remain significant. BLOOMBERG