Chinese electric cars are dominating the growing EV market across the world. Some countries – typically those without a domestic car manufacturing industry – are embracing the arrival of these low-cost, high-quality cars. Others, most notably the United States and the countries of the European Union, are adopting protectionist policies such as imposing high import tariffs.
China has recently launched dispute settlement proceedings at the World Trade Organization (WTO) against the European Union’s (EU) provisional anti-subsidy measures targeting Chinese electric vehicles. This action, announced by the Ministry of Commerce of China (MOFCOM), is aimed at protecting the interests of China’s burgeoning EV industry and, they say, fostering global green transition cooperation.
According to experts, China’s move signals its decision to use the multilateral mechanism of the WTO to address the ongoing conflict with the EU over the provisional tariffs placed on China-manufactured electric cars. Such mediation could potentially lead to new discussion frameworks within the EU.
Industry insiders have pressed the EU to embrace healthy competition with China in the EV sector and to bolster green cooperation efforts. They advocate for this approach as a means to sustain the stable development of economic and trade relations between China and the EU and to jointly tackle climate change challenges.
In a statement posted on the official MOFCOM website, the ministry criticized the findings of the EU’s preliminary ruling, claiming they lack both factual and legal foundation, violate WTO rules, and pose a threat to global collaborative efforts to combat climate change.
“We urge the EU to immediately rectify its wrongful practices and jointly safeguard China-EU economic and trade cooperation and the stability of the EV industry and supply chains,” the ministry stated.
Jian Junbo, Deputy Director of the Center for China-Europe Relations at Fudan University’s Institute of International Studies, commented in an interview that the MOFCOM’s decision represents a lawful response to the EU’s investigation and the subsequent imposition of provisional tariffs on Chinese EVs, which China asserts are against WTO regulations. Jian highlighted that China is employing a multilateral platform to settle bilateral trade disputes, which is expected to help sustain bilateral economic and trade relations.
“China is leveraging diverse approaches to address the issue, aiming to avoid an impasse,” Jian added.
Entrance of the World Trade Organization (WTO) headquarters, an intergovernmental organization dealing with regulation of international trade between nations.
Zhang Xiang, Secretary General of the International Intelligent Vehicle Engineering Association, remarked that China’s recourse to the WTO mediation demonstrates its intention to resolve the dispute initiated by the EU through dialogue and to minimize the negative impact on car companies in both China and Europe. Zhang noted the deep interconnection between Chinese and European car manufacturers, emphasizing the importance of maintaining collaborative relations.
China’s latest move comes on the heels of a report by the Financial Times, which indicated that Valdis Dombrovskis, the European Commissioner for Trade, mentioned that EU member states are likely to endorse the proposed tariffs on Chinese EVs in November.
Will GCC countries impose tariffs on Chinese EV imports?
As of now, there is no indication that GCC countries will impose tariffs on Chinese electric vehicle imports. On the contrary, the relationship between GCC countries and Chinese EV manufacturers appears to be growing stronger. Chinese EV companies are actively expanding into the GCC market, capitalizing on the region’s ambitious energy diversification goals. The GCC countries are interested in leveraging Chinese expertise in EV technology to support their own economic diversification and renewable energy initiatives.
The GCC’s economic strategy includes not only adopting EVs but also establishing local manufacturing capabilities, with Chinese firms playing a significant role in these efforts. For example, major Chinese automakers like BYD have already secured significant investments and partnerships in the region, suggesting a collaborative rather than adversarial trade relationship.
Given the GCC’s strategy of fostering closer economic ties with China, especially in non-oil sectors, it seems unlikely that they would take steps like imposing tariffs that could hinder this growing partnership. Instead, the focus remains on mutual benefits, with the GCC aiming to become a hub for both the adoption and export of EVs, potentially in collaboration with Chinese manufacturers.
