In a move aimed at averting a potential trade war, China and the European Union have agreed to hold talks concerning the tariffs proposed by the EU on Chinese-made electric vehicles. The dialogue, initiated following German Vice-Chancellor Robert Habeck’s visit to China, is set to address the EU’s concerns over unfair subsidies that allegedly give Chinese EV manufacturers an edge in the European market. The EU Commission, which has been investigating these subsidies, claims that Chinese electric vehicles are typically 20% cheaper than their European counterparts due to these subsidies. The Commission has indicated that tariffs could be imposed if no solution is found, with the potential rates being as high as 38%. The talks are seen as a crucial step in maintaining fair competition and ensuring economic cooperation between the two global trade powers and are expected to continue until November, when the EU plans to review and possibly set final tariff rates for the next five years.During his visit, Habeck also urged China to stop exporting goods to Russia, highlighting the significant increase in trade between the two countries and expressing concerns over the implications for the ongoing conflict in Ukraine. The German Vice-Chancellor’s statements reflect the broader geopolitical tensions and the delicate balance of international trade relations. Germany’s mediation efforts have been acknowledged, although the minister’s role was downplayed, with some critics calling for measurable progress in reciprocity, such as participation in public tenders and market access. Habeck has emphasized the importance of a European alliance to compete with China and has been critical of China’s human rights record during his visit.
Key points
- China and the EU agree to hold talks to prevent a trade war over tariffs on Chinese-made electric vehicles.
- German Vice-Chancellor Robert Habeck plays a key role in initiating dialogue between the two parties.
- EU Commission investigates China’s EV subsidies, with potential tariffs of up to 38%.
- Habeck urges China to stop exporting goods to Russia amid increased trade.
