Editorial | China-EU compromise over EVs bodes well for trade and overall ties
With the Trump administration turning aggressive towards allies and foes alike, Beijing and Brussels have more reasons to work together
At a time when US President Donald Trump has turned aggressive towards allies and foes alike, Brussels and Beijing have all the more incentive to turn to each other to seek win-win outcomes where they can, or minimise friction when they can’t.
Under the new framework, EU tariffs may be waived if imported Chinese EVs meet the minimum pricing required to eliminate any advantage their producers enjoy from Chinese government subsidies. Corresponding investments in EU countries and export limits from the Chinese side will also be looked on favourably.
Of course, assessments will be made individually, which are supposed to follow rules under the World Trade Organization. So the two sides won’t be eliminating all trade friction, but only setting up a more transparent mechanism to handle disputes.
Still, it is a significant step forward that may provide an example for other trading partners of China, such as Brazil and Canada, in handling not only Chinese EV exports but also other industrial sectors. Even American multinationals may benefit from such a pragmatic approach as many have a heavy business presence in Europe.
China and the EU have shown they can be smart and pragmatic. Where there is the will and wisdom, compromise can overcome antagonism. Having been accused of flooding Europe with high-quality but underpriced EVs that undercut the continent’s carmakers, particularly from France and Germany, the Chinese side has wisely found a way to address the issue. In truth, Chinese EV makers may forgo some market share, but higher prices mean bigger profits or at least fewer losses. European carmakers such as Volkswagen, with substantial joint ventures in China, will also benefit directly.