China ‘does not accept’ EU tariffs on EVs, vows to firmly defend interests

Chinese officials, business organizations and carmakers on Wednesday fiercely criticized the EU's decision to impose so-called countervailing tariffs on imports of Chinese electric vehicles (EVs), urging the bloc to advance talks to reach a mutually acceptable solution as soon as possible to avert escalating trade friction.

They also vowed to take all necessary measures to protect the legitimate rights and interests of Chinese companies. Significantly, on Wednesday, the Chinese Ministry of Commerce (MOFCOM) said it has filed a complaint at the WTO against the EU's move, while a Chinese carmaker said it plans to file suit at the Court of Justice of the EU.

While both sides remained open to continuing negotiations, Chinese experts said that the EU has shown a lack of sufficient sincerity, as it insists on its imposing hefty tariffs against Chinese EV makers and seeks to conduct separate negotiations with individual firms in order to take firms down one by one, experts noted.

Unacceptable move

In a press release on Tuesday, the European Commission (EC), the executive branch of the EU, said that it has concluded its anti-subsidy investigation by imposing definitive countervailing duties on imports of EVs from China for a period of five years.

The press release said that the so-called countervailing duties on Chinese EVs, ranging from 17 percent to 35.3 percent, would enter into force on the day following the publication in the Official Journal, meaning that they took effect on Wednesday.

The move prompted harsh criticism from China. In a statement on Wednesday morning, a spokesperson for MOFCOM said that China "does not agree nor accept" the definitive ruling and has filed suit under the WTO dispute settlement mechanism. 

"China will continue to take all necessary measures to resolutely safeguard the legitimate rights and interests of Chinese enterprises," the MOFCOM spokesperson said, while calling out the EU for engaging in unfair and protectionist actions under the guise of "fair competition." 

At a regular press briefing on Wednesday afternoon, Lin Jian, a spokesperson for the Chinese Foreign Ministry, criticized the EU's move as "pure protectionism detrimental to China-EU industrial and supply chain cooperation, to European consumers, and to EU's green transition and global climate response."

The response from the Chinese business community was swift and harsh. In a statement sent to the Global Times on Wednesday, the China Chamber of Commerce for Import and Export of Machinery and Electronic Products (CCCME), which is representing the Chinese EV industry in the case, said the EC's definitive ruling is unfair, unreasonable and unobjective, and seriously violates the relevant anti-subsidy regulations of the WTO as well as the EU itself. 

"As the defense party in this investigation, the CCCME will continue to lead companies to do well in the price commitment negotiations, and we will effectively safeguard the legitimate rights and interests of the Chinese EV industry and companies through various legal means," the statement said. 

The China Association of Automobile Manufactures on Wednesday also slammed the EU's protectionist action and said that it firmly upholds and supports the Chinese government's WTO suit against the EU to protect Chinese firms' legitimate rights and interests.   

Some Chinese EV makers are already considering legal action against the EC's move. In a statement to the Global Times on Wednesday, SAIC Motor, which faces the highest tariff rate of 35.3 percent, said it plans to take necessary legal action to bring its case to the EU Court of Justice to safeguard its legitimate right and interests.

Earlier on Wednesday, the China Chamber of Commerce to the EU said that the EU's "unjustified" move against Chinese EVs can "neither strengthen the EU's EV manufacturing resilience, nor foster innovation or job creation," according to a statement to it sent to the Global Times. 

Yang Erlin, chairman of the Finnish Chinese Business Council and CEO of the Finland-China Development and Exchange Center, told the Global Times on Wednesday that while some Finnish businesses support the EU's move, others are focused on the impact of the policy on the Finnish economy, industry competitiveness and commercial ties with China. 

Yang noted that the business community is worried that if the tariffs dampen China's interests in the European market, it may dampen the prospects for cooperation in areas such as green technology and green energy and may have an adverse impact on some Finnish companies hoping to expand into the Chinese market.

He Weiwen, a senior fellow at the Center for China and Globalization, said that in terms of the timing, the EC's announcement on Tuesday is in line with its own procedures; however, the EC's determination about subsidies is unacceptable. 

"We can engage the EU side under the WTO mechanism, and if the WTO finds the EU in violation, the EU will be compelled to rectify its wrong practices," He told the Global Times on Wednesday, while adding that there is still room for the two sides to resolve the dispute through consultation.   

Continuing talks

Notably, both sides on Wednesday indicated that consultations will continue. The headline of the EC's press release on Tuesday stated that "discussions on price undertakings continue." 

"In parallel, the EU and China continue to work toward finding alternative, WTO-compatible solutions that would be effective in addressing the problems identified by the investigation," it said. 

In the statement on Wednesday, the MOFCOM spokesperson said the Chinese side had noted the EU's comments about continuing price commitment talks with China, and stressed that China has persisted in addressing the trade dispute through dialogue and consultation.   

The spokesperson said that the technical teams of the two sides are conducting a new phase of consultation. "It is hoped that the EU side will jointly advance the talks in a constructive manner and under 'pragmatic and balanced' principles, address each other's core concerns, and reach a mutually acceptable solution as soon as possible, so as to avoid escalating trade frictions," the spokesperson said. 

Experts said that while the EC has indicated its willingness to continue negotiations with China, it has not shown sufficient sincerity.

"The EU has agreed to conduct consultations based on the direction of price commitment offers made by China, but some of the EU's demands are unacceptable," said He, noting the EC's decision to apply different tariff rates against different carmakers. "Clearly, the EU lacks sincerity in the negotiations."

While the Chinese side has repeatedly urged the EU to refrain from conducting separate negotiations with individual carmakers and focus on negotiations led by the CCCME, the EU appears to be continuing its strategy, stating in the press release on Tuesday that it remains open to negotiations with individual exporters.

"By conducting separate negotiations with individual firms, the EU is seeking to take the companies down one by one," Wang Yiwei, a professor at the School of International Relations at the Renmin University of China, told the Global Times on Wednesday. 

Wang said that the EC is well aware that the EU is falling far behind in EV development and is seeking to force Chinese companies to move some of their production to the EU, share their technologies, and relocate their supply chains. 

"The EC is not just after tariffs. It wants Chinese companies' supply chains, technologies and localized operations," Wang said, stressing that the WTO rules are on China's side, as China moves to safeguard its rights and interests.