EU and China to Discuss Minimum Prices for Electric Vehicles
The European Union and China have agreed to explore setting minimum prices on Chinese-made electric vehicles (EVs) instead of the tariffs imposed by the EU last year. This development comes as a European Commission spokesperson confirmed on Thursday, April 10.
According to the spokesperson, EU trade commissioner Maros Sefcovic spoke with Chinese Commerce Minister Wang Wentao within the last 24 hours, and both sides agreed to look into setting minimum prices. China’s Commerce Ministry stated that negotiations are set to begin immediately.
The EU had increased tariffs on Chinese-built EVs to as much as 45.3% last October. However, Brussels and Beijing have been exploring the possibility of lifting these tariffs through potential commitments to minimum prices, known as price undertakings for imported cars.
The European Commission has expressed willingness to continue negotiating an alternative to tariffs with China. The initial tariffs included rates of 17.0% for vehicles made by BYD, 18.8% for Geely, and 35.3% for SAIC, on top of the EU’s standard car import duty of 10%.
The German auto industry association VDA has welcomed the talks between the EU and China, describing the duties as a “mistake” and advocating for a negotiated solution. German carmakers, who made a third of their sales last year in China, had opposed the tariffs due to concerns about a trade conflict with their second-largest trading partner after the U.S.
The trade tensions have also affected other industries, including French cognac makers, who faced retaliatory trade action from Beijing. The situation has hurt sales in the world’s second-largest economy and impacted major brandy market players like Hennessey, Remy Cointreau, and Pernod Ricard.
As U.S. President Donald Trump embarks on a trade war with some of the United States’ closest trading partners, including the EU and China, the discussions between the EU and China aim to find a truce in their longstanding spat.
