Chinese Commerce Minister to Visit Europe ahead of a Make-or-Break EU EV Tar...

TMTPost -- Chinese Commerce Minister Wang Wentao is going to discuss in-person with his European counterparts ahead of a make-or-break vote by the European Union members to make extra electric vehicle (EV) tariffs permanent for five years.

Credit：Xinhua News Agency

Wang will visit Europe in the coming days hold talks with the European Commission's Executive Vice President and Trade Commissioner Valdis Dombrovskis on Sept. 19, a spokesperson the Ministry of Commerce of China (MOFCOM) said at a regular press conference Thursday. Wang’s talks will center on the EU's anti-subsidy case against Chinese-made EVs, according to the spokesperson. The person added the ministry will disclose information on the visit and development of Want’s negotiations in a timely manner.

Wang’s trip comes as the EU is prime for a sharp EV tariff hike based on its probe into Chinese EVs and a vote about the final approval by its member states is set to take place in recent months.

The European Commission announced on July 4 it imposed provisional countervailing duties of up to 37.6%, on top of the ordinary BEV import duty of 10%, on imports of battery electric vehicles (BEVs) from China. The commission concluded through an anti-subsidy investigation that the BEV value chain in China benefits from unfair subsidization, which is causing a threat of economic injury to EU BEV producers.

The European Commission disclosed last month its draft decision to impose definitive countervailing duties on imports of BEVs from China to interested parties.The Commission said it would make a slight adjustment of the proposed duty rates based on substantiated comments on the provisional measures, though it still believes Chinese EV production has been benefited from subsidies. The regulatory body proposed to add up to 36.7% to the current 10% duty faced by Chinese exporters, modestly lowered from the initial maximum planned duty of 37.6% set in the start of July.

The European Commission suggested, in a statement on July 4, the long-term definitive duties will be effective no later than four months ago, if approved by EU countries. All the provisional duties are applied for a maximum duration of four months starting from July 5. Within the four-month timeframe, a final decision must be taken on definitive duties, through a vote by EU member States, and when adopted, this decision would make the duties definitive for a period of five years, the Commission said.

The proposed final duties will be subject to a vote by the EU's 27 states. They will be implemented unless a qualified majority of 15 EU members representing 65% of the EU population vote against.

Eralier this week, heads of two leading European economies call on the European Union to push back the additional tariffs. Spanish Prime Minister Pedro Sánchez said the EU should reconsider its plan to impose additional tariffs of up to 36 percent on Chinese-made EVs. "We don't need another war, in this case a trade war," Sánchez said before concluding a four-day trip in China. "I think we need to build bridges between the European Union and China, and from Spain what we will do is to be constructive and to try to find a solution, a compromise, between China and the European Commission."

Sánchez became the first to demand a rethink to the impending trade measures. German Chancellor Olaf Scholz joined his calling for the EU to drop its new EV tariff plan. German government spokesman Steffen Hebestreit welcomed the Spanish move, saying “the direction of travel is one that we share.”

A Bloomberg report noted Germany and Spain have massive financial incentives to avoid a spiral of tit-for-tat restrictions. German automakers would be hit hardest in a trade spat as they collectively sold 4.6 million cars there in 2022. Spain, as one of the EU’s largest automaking countries second to Germany, is seeking to attract investments from China to develop its EV industry — part of the reason behind Sanchez’s trip there this week.

Germany and Spain aren’t the only countries that are skeptical of the EU’s stance. Swedish Prime Minister Ulf Kristersson said in May that the EU must consider the benefits of trading with China when making a decision about EV tariff. “It is fundamentally a bad idea to dismantle global trade,” Kristersson said Tuesday when asked about the prospects for EU tariffs on Chinese cars. “You shouldn’t be naive — sourcing can be disrupted for various reasons and we have good reasons to demand a level playing field, but a wider trade war where we block each other’s products is not the way to go for industrial nations such as Germany and Sweden.”