China mulls filing a grievance against EU car tariffs in the World Trade Organization.

China mulls filing a grievance against EU car tariffs in the World Trade Organization.

The European Commission declared on a Wednesday that they'll impose fines on Chinese-made electric cars, effective from July 4th. Their reason for this action was due to allegedly "unfair" subsidies offered to the Chinese electric car industry.

The European Commission will negotiate with Chinese officials and corporations until July 4th. If no resolution is reached, existing 10% tariffs on vehicles produced in the People's Republic will drastically increase. The suggested additional fees are: 17.4% for BYD, 20% for Geely, and 38.1% for SAIC.

On Thursday, the Chinese Foreign Ministry's representative commented that the EU Commission's decision "lacks a factual and legal basis." The spokesperson asserted it infringes on the rights and interests of the Chinese electric car industry, potentially causing disruptions in automotive production and global supply chains - encompassing those within the EU.

Both the German government and German vehicle manufacturers have publicly opposed the fines, as they fear the onset of a trade war. In particular, Germany is concerned as Brussels, where France supported imposing greater tariffs more vocally. French car manufacturers have lower market presence in China than their counterparts from Germany.

However, the Federation of German Industries (BDI) supported the Brussels approach on Wednesday: China has ignored WTO guidelines. Hence, it's proper for the EU Commission to "persistently utilize its defensive measures."

If the Commission's decision is to be nullified, Germany must convince 15 member states in the Council of Ministers, collectively representing a minimum of 65% of the EU population. If this goal isn't attained, temporary fines will transition to permanent ones after a few months.

Read also:

1. The World Trade Organization (WTO) could potentially become a venue for China's dispute against the EU's car tariffs.
2. The WHO (World Health Organization) was not mentioned in the context of this text, but it can be related in a separate context as both are international organizations.
3. In Beijing, officials from Geely International, BYD, and SAIC might be closely following the developments regarding the EU car tariffs.
4. The Chinese electric car industry, heavily represented by companies like BYD, Geely, and SAIC, could face significant challenges due to the EU's penalty duty on their vehicles.
5. The EU Commission's lawsuit against China at the WTO could potentially escalate into a broader dispute between the two major trading blocs.
6. The EU car tariffs on Chinese-made electric cars could potentially affect global supply chains, impacting industries beyond automotive.
7. China may seek support from other members of the World Trade Organization (WTO) to argue against the EU's car tariffs and penalty duties.

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