China and EU try to ease tensions over trade tariffs

This article was originally published in English

China and EU member states prepare for talks amid escalating trade tensions. Over the weekend, Chinese Trade Minister Wang Wentao met in Turin with Roberto Vavassori, president of the Italian Automobile Industry Association.

According to a press release from the Chinese Ministry of Commerce, the two parties They exchanged views on the EU anti-subsidy investigation into Chinese electric vehicles and discussed cooperation between the Chinese and Italian electric vehicle industries.

This meeting took place before a key event, September 19thwhen Wang will visit Europe to meet with European Commission Trade Commissioner Valdis Dombrovskis and discuss Growing trade tensions between China and the EU.

The European Commission (EC) has proposed impose additional tariffs of up to 35.3% on Chinese imports of electric vehicles, arguing that Beijing’s “unfair subsidies” on Chinese-made electric vehicles could significantly harm local manufacturers.

Beijing investigates imports of pork and brandy

In response, China has stepped up its investigation on European imports of food and drinkincluding pork and brandy. However, recent developments suggest that both China and the EU have expressed a willingness to ease the growing trade conflict.

Upcoming talks between Chinese and EU officials are of great importance in addressing tensions and seek compromises from both parties.

In recent events, the EU has further reduced a number of proposed tariffs on Chinese-made electric vehicles, with Tesla the biggest beneficiary. The tax on China-made Teslas has been cut from 9% to 7.8%, following a previous cut from 20.8% last month.

Tariffs on Chinese automaker Geely have dropped from 19.3% to 18.8%while those of SAIC and companies that did not cooperate with EU investigations have been reduced from 36.3% to 35.3%.

However, the tariff on the best-selling Chinese brand, BYD, remains unchanged at 17%. These additional tariffs come on top of to the existing 10% applied to Chinese imports of electric vehicles.

Tariffs still need the support of member states

The new EU tariffs must be approved by the majority of the populationi.e. 15 of the 27 EU member states, by 31 October. If approved, the new tariffs will remain in force for the next five years.

In response, a Chinese Ministry of Commerce spokesman said: “China is willing to continue close cooperation with the EU “in order to reach an early solution that serves the common interests of both sides and conforms to the rules of the World Trade Organization, so as to promote the healthy and stable development of economic and trade relations between China and the EU.”

The spokesman added: “While we do not agree nor do we accept the disclosure of the final resolution by the EU“We remain committed to resolving the friction through dialogue and consultation, with the aim of finding a mutually acceptable solution,” according to China’s state news agency Xinhua.

Last week, the European Commission rejected proposals from Chinese electric vehicle manufacturers to set a minimum price to compensate for public subsidies.

A European Commission spokesperson commented: “Our review focused on whether the proposals would eliminate the harmful effects of subsidies and whether they could be effectively monitored and enforced.”

“The Commission has concluded that None of the proposals met these requirements“He added: “The Commission remains open to a negotiated solution, but must fully comply with WTO rules and effectively address the harmful effects of the identified subsidies.”

In June, China said it had launched an anti-dumping investigation into imports of pork from the EUSpain being one of the main exporters in the single market.

“Constructive” conversations with Sanchez

Spanish Prime Minister Pedro Sánchez visited China last week in an effort to ease trade tensions between the two countriesChinese President Xi Jinping said the visit played a “constructive role” in improving China-EU ties.

China also launched a similar investigation into EU brandy imports in January, alleging that EU products could significantly harm their domestic industry.

In its latest statement, the Chinese Ministry of Commerce said that “the investigating authority preliminarily determines that there is ‘dumping’ in the import of brandy from the EU, that the domestic brandy industry is threatened with substantial harm and that there is a causal relationship between dumping and the threat of injury.

“But the Ministry will not impose tariffs for nowwhich would severely affect French cognac exports, which account for the bulk of China’s brandy imports from the EU.”