AutoBeta(AutoBeta.net)08/13 Report--

In order to safeguard the rights and interests of the development of the electric vehicle industry and global cooperation in green transformation, China has resorted to the WTO dispute settlement mechanism for EU temporary countervailing measures for electric vehicles, a spokesman for the Ministry of Commerce said on August 9. The finding in the preliminary adjudication of the European Union lacks the factual and legal basis, seriously violates the WTO rules, and damages the overall situation of global cooperation in dealing with climate change. We urge the EU to immediately correct its erroneous practices and jointly safeguard China-EU economic and trade cooperation and the stability of the supply chain of the electric vehicle industry chain.

On July 4, local time, the European Commission (hereinafter referred to as "the European Commission") issued an announcement to impose a temporary countervailing duty on electric vehicles imported from China from July 5 for a maximum period of four months. In the meantime, EU member states will vote on the final countervailing measures, and if passed, the EU will formally impose a five-year countervailing duty on Chinese electric vehicles. However, the European Commission said in its announcement that it would continue to consult with the Chinese side with a view to reaching a solution in line with WTO rules.

According to the announcement, three Chinese car companies sampled by BYD, Geely Automobile and SAIC will be levied temporary countervailing duties of 17.4%, 19.9% and 37.6% respectively, with SAIC lower than the tax rate disclosed on June 12. BYD and Geely remain unchanged. In response, the European Commission explained that the change was based on comments submitted by interested parties on the accuracy of the calculation. According to the EU announcement, other Chinese car companies that cooperate but are not sampled will be subject to a weighted average tariff of 20.8 per cent, while those without cooperation will have a tax rate of 37.6 per cent. At present, the EU imposes a 10% tariff on all imported cars, which means that the tariff on the export of BYD electric vehicles to Europe will reach 27.4%, Geely 29.9% and SAIC as high as 47.6%.

On July 17, the European Union held an "advisory vote" on imposing tariffs on Chinese-made electric vehicles. Twelve EU member states, including France, Italy and Spain, supported it, four opposed it, and 11 member states, including Germany, Finland and Sweden, abstained. According to the report, the vote is confidential in writing and is not binding. According to the report, a number of member states abstained from voting, indicating that they are "aware of the risk of a trade war with China." Reported that the vote is not binding, after which a final vote will be held to decide whether to adopt the tariff proposal of the European Commission.

Notably, according to people familiar with the matter, the European Commission has signaled to Volkswagen and BMW that they may consider lowering import tariffs on electric vehicles made in China by the two carmakers. The European Commission is willing to classify Volkswagen and BMW as companies that cooperate with sample surveys, reducing tariffs on Chinese-made models of the two companies to 20.8 per cent, compared with 37.6 per cent under the current plan, according to people familiar with the matter.

The European Commission has not yet finally decided whether to lower import tariffs on Chinese-made electric cars made by Volkswagen and BMW, two people familiar with the matter said. If the European Commission reaches an agreement with Volkswagen and BMW, it will be the first preliminary compromise on tariffs by the European Commission. In addition to Volkswagen and BMW, Tesla, the US carmaker that makes electric cars in China, is also likely to receive a separate tax rate in the final stage.

In October, EU member states will vote on the European Commission's proposal for import tariffs on Chinese-made electric vehicles. At that time, if the result of the vote is consistent with that of the European Union, the tariff will be raised from an interim bill to a five-year tariff policy. If the tariff bill is to be blocked, at least 15 of the EU's 27 member states, which account for at least 65% of the EU's total population, will have to vote against it. According to the latest report from the Financial Times, EU Trade Commissioner Valdis Dombrovskis said that by November this year, all 27 EU member states are expected to support the European Commission in imposing tariffs of up to 38 per cent on electric vehicles imported from China. He believes that as the market share of Chinese pure electric vehicles in Europe is growing rapidly, EU member states have realized the need to protect the EU auto industry.

At present, China and the EU still have four months to hold relevant consultations. The EU-China Chamber of Commerce said that recently, a number of European car companies have continued to speak out against taxing Chinese electric vehicles and suggested that the two sides resolve trade frictions through dialogue and consultation. The EU-China Chamber of Commerce once again calls on China and the EU to continue to accelerate dialogue and consultation, to reach a solution acceptable to both sides, in line with WTO rules and with the expectations of enterprises and markets of both sides, and to effectively resolve economic and trade frictions. we will stabilize the confidence and expectations of trade and investment cooperation between Chinese and European enterprises, and jointly promote the transformation of automobile electrification and achieve the goal of climate neutrality.

At present, China and the EU still have four months to hold talks, but there is no small challenge to prevent the EU from formally imposing tariffs in four months' time. On the one hand, there is a need for continued dialogue between China and the EU; on the other hand, Chinese electric car companies should also be prepared to step up lobbying efforts while looking for other potential markets.

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