China’s Ministry of Commerce announced it had launched an additional appeal with the World Trade Organization (WTO) over the EU’s tariffs on Chinese electric vehicle (EV) imports. The tariffs will remain in place for five years unless an alternative solution is found.
“In order to safeguard the development interests of the electric vehicle industry and global green transformation cooperation, China has decided to file a lawsuit against the EU’s final anti-subsidy measure,” the Chinese Commerce Ministry said on Monday.
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The EU finalized the decision last week, imposing tariffs of up to 35.3% on Chinese-built EVs. The decision follows a year-long investigation looking at whether Chinese government subsidies to the EV industry had created an unfair advantage.
China had already filed a complaint under the WTO dispute settlement mechanism in August.
China is requesting consultations with EU officials which will take place for 60 days before a panel is gathered to rule on the dispute. Appealing to the WTO’s highest body will not be an option due to a lack of judges caused by friction with the US.
Shaun Rein, managing director of China Market Research, told CNBC that the complaint “is a warning shot against Europe to show that [China] is strong but won’t go too far.” He added that, given the growing tensions between China and the US, they will be more interested in stabilising their economic relationship with the EU.
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By GlobalDataSam Radman, chief executive of consultancy Enhance International, agreed with Rein as he told CNB that China would put its “best foot forward and make every effort” to find a solution with the EU.
“EU is not interested in trade wars, we are looking for rebalancing our relationship with China in areas where we feel our relationship is not fair,” the Commission’s vice president Maros Sefcovic told a parliamentary committee on Monday. He added that China is the EU’s “most challenging trading partner.”
China told automakers to halt investments for major projects in European countries that voted in favour of the tariffs and “encouraged” them to veer investments towards countries that had voted against the tariffs, Reuters reported last week.
The EU’s decision to raise tariffs on Chinese EVs prompted retaliatory measures on European exports such as pork, dairy and brandy.
