EU and China to engage in discussions regarding proposed electric vehicle tariffs.
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Robert Habeck, Germany's Economy Minister, revealed that concrete negotiations on tariffs with China are imminent, following a confirmation from EU Commissioner Valdis Dombrovskis. This announcement was made after China's Commerce Ministry confirmed that consultations on the EU's anti-subsidy investigation into Chinese electric vehicles (EVs) have commenced.
"This is fresh news, as we haven't managed to establish a specific negotiation schedule in recent weeks," Habeck stated in Shanghai. He admitted that this is just a beginning and there's much more to be done. "We've taken a significant first step, though, one that was unachievable earlier," he added.
Earlier on the same day, Habeck stated that the European Union was open to conversations about EU tariffs on Chinese exports. "I suggested to my Chinese counterparts today that the dialog is possible, and I hope they comprehended that," he said after meetings with Chinese officials in Beijing.
Habeck's visit to China marked the first by a senior European official since Brussels proposed steep duties on imports of Chinese-made EVs to counter what the EU considers excessive subsidies.
Habeck pointed out that there's still time for talks between the EU and China on tariff matters before the duties become effective in November. He emphasized his belief in open markets, but only when they provide a level playing field.
He asserted that subsidies intended to boost the export advantages of companies are unacceptable.
Another source of friction between Beijing and Berlin is China's support for Russia in the war in Ukraine. Habeck remarked that Chinese trade with Russia surged by more than 40% last year.
He told Chinese officials that this was adversely impacting their economic relationship. "Evading the sanctions imposed on Russia isn't tolerated," he stated, adding that European-produced technological goods should not be used in the war via other countries.
Not a 'Penalty'
The provisional duties set at up to 38.1% on imported Chinese EVs by the EU are scheduled to take effect by July 4, with the investigation set to continue until November 2, when potentially five-year definite duties could be imposed.
"This initiates a phase where negotiations are possible, discussions are important, and dialog is required," Habeck said.
The proposed EU tariffs on Chinese goods are not meant as a "Penalty," Habeck conveyed to Chinese officials in Beijing. "It's crucial to grasp that these aren't punitive tariffs," he stated during the first plenary session of a climate and transformation dialog.
Countries such as the United States, Brazil, and Turkey have employed punitive tariffs, but not the EU, he noted. "Europe operates differently."
Habeck explained that the European Commission has spent nine months meticulously examining whether Chinese companies have received unfair subsidies.
Any countervailing duty measure that results from the EU review "is not a Penalty," he said, clarifying that such measures are intended to offset the advantages granted to Chinese companies by Beijing.
Zheng Shanjie, chairman of China’s National Development and Reform Commission, responded: "We will do everything to protect Chinese companies."
Proposed EU duties on Chinese-made EVs would negatively impact both parties, Zheng added. He appealed to Germany to demonstrate leadership within the EU and "do the right thing."
He also denied allegations of unfair subsidies, asserting that the growth of China's new energy industry was the result of technological, market, and supply chain advantages earned through fierce competition. The industry's progress "is the outcome of competition, rather than subsidies, let alone unfair competition," Zheng reiterated during the meeting.
