Brussels, Belgium – The dispute between the European Union (EU) and China regarding import taxes on Chinese electric vehicles (EVs) seems to be showing signs of potential resolution. After a discussion between top officials from both regions over the weekend, negotiations are set to begin, though tensions still linger.

The EU has accused China of unfairly subsidizing its EVs, prompting China to retaliate by accusing the EU of protectionism and violating trade rules. Despite the ongoing frictions, Trade Commissioner Valdis Dombrovskis and Chinese counterpart Wang Wentao engaged in a “candid and constructive” conversation, as stated by an EU spokesperson.

Both sides have committed to further talks in the following weeks, aiming to address the issues surrounding the subsidies in the Chinese EV industry. However, the EU remains steadfast in its opposition to the current funding mechanisms employed in China.

In response, China reiterated its opposition to the EU’s stance. Notably, Wang Wentao also met with German Vice-Chancellor and Federal Minister for Economic Affairs and Climate Action Robert Habeck during the same period, restating its intention to defend its rights and interests through a potential lawsuit filed with the World Trade Organization (WTO).

Germany has also expressed discontent with the proposed tariffs, with Transport Minister Volker Wissing warning against the risks of sparking a “trade war” with China. Companies in the European car industry, such as Stellantis, have voiced their concerns, emphasizing the negative impact these measures could have on global trade relations.

The proposed import taxes range from 17.4% to 38.1%, varying depending on the brand and individual negotiations conducted with the EU. These charges would be in addition to the existing 10% tariff imposed on all electric vehicles originating from China.

The developments in the negotiations between the EU and China highlight the complexities and challenges involved in the global trade landscape, particularly within the rapidly growing electric vehicle market. The outcome of these discussions will not only impact the two regions directly involved but could also have far-reaching consequences for the wider automotive industry worldwide.