China-EU trade war erupts as Beijing files WTO complaint over EV tariff hikes

Commerce Ministry says it hopes the bloc will ‘work with China’ to find resolution, despite European Union’s decision to boost taxes

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A trade dispute between China and the EU over electric vehicles has landed at the World Trade Organization. Photo: AFP

Published: 12:36pm, 30 Oct 2024Updated: 9:16pm, 30 Oct 2024

A trade war between China and the European Union is set to intensify, with Beijing lodging a complaint with the World Trade Organization in response to an EU decision to raise tariffs on Chinese-made electric vehicles.

China’s Ministry of Commerce said on Wednesday that it “does not agree with or accept” the EU’s decision to proceed with extra duties on the EVs after the conclusion of an anti-subsidy probe that began last year.

A final ruling published by the European Commission on Tuesday stated that a top rate of 35.3 per cent would apply to EVs from Chinese state-owned company SAIC Motor and its subsidiaries, in addition to a baseline 10 per cent duty that applies to all EV imports.

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Major Chinese carmakers BYD and Geely were set to face extra duties of 17 per cent and 18.8 per cent respectively. The extra tariffs were to take effect as early as Wednesday and would last for five years.

“China will continue to take all necessary measures to resolutely safeguard the legitimate rights and interests of Chinese companies,” the ministry said after filing the complaint with the WTO’s dispute settlement mechanism.

The ministry said China advocated resolving trade conflicts through dialogue, adding that it was conducting a “new phase of consultations” with the European bloc.

“We hope that the European side will work with China in a constructive manner … and reach a solution acceptable to both sides as soon as possible to avoid escalating trade frictions,” it said.