China files WTO complaint against EU

The bloc’s preliminary ruling on import duties “lacks factual and legal basis,” Beijing has argued

China has filed a complaint with the World Trade Organization (WTO) over the European Union’s imposition of provisional additional tariffs on electric vehicles (EVs) made in the Asian country.

The EU last month slapped tariffs ranging from 17.4% to 37.6% on Chinese EV imports on top of existing 10% duties, citing Beijing’s “unfair subsidization” of car manufacturers.

The Chinese Ministry of Commerce said on Friday that it had turned to the WTO dispute settlement mechanism “to safeguard the development rights and interests of the electric vehicle industry and cooperation on the global green transformation.” 

The ministry argued that the EU’s preliminary ruling lacks a factual and legal basis, seriously violates WTO rules and undermines global cooperation on climate change.

“We urge the EU to immediately correct its wrong practices and jointly maintain the stability of China-EU economic and trade cooperation as well as EV industrial and supply chains,” the Chinese ministry said.

The EU’s introduction of tariffs in early July followed an investigation launched last year by the European Commission into claims that subsidies allowed Chinese EVs to be sold at much lower prices than ones produced in the bloc. Based on the results of the probe, the commission concluded that the battery electric vehicles (BEV) “value chain” in China benefits from “unfair subsidization,” which is causing a “threat of economic injury” to EU car makers. A definitive decision on the tariffs is due by November.

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China’s Ministry of Commerce has warned that the EU could trigger a “trade war” if it continues to escalate tensions. Beijing also accused the bloc of unfair practices during its anti-subsidy probe, and responded by launching an anti-dumping investigation in relation to certain pork products from the EU.

The EU is the largest overseas market for Chinese EV makers. The value of EU imports of Chinese electric cars surged to $11.5 billion in 2023, from just $1.6 billion in 2020, accounting for 37% of all EV imports to the bloc, according to recent research.

The EU’s prohibitive move followed the US raising its tariff on Chinese EVs from 25% to 100% in May.