China-EU trade tensions rise over electric vehicles.
Trade ties between China and the European Union are showing signs of strain amid growing protectionism over the auto sector. Chinese automakers have called on Beijing to impose import duties on European cars in response to proposed EU tariffs on Chinese electric vehicles (EVs).
At a closed-door meeting organized by China’s commerce ministry, industry representatives reportedly urged countertariffs of up to 25% on large petrol cars from Europe. This comes after the EU last week said Chinese EV producers could face duties from 4th July to offset alleged unfair subsidies.
If counter-tariffs are implemented, luxury models with engine capacities above 2.5 liters are expected to be targeted. However, experts note this may have a limited impact on sales volumes of high-end brands. German automaker Volkswagen, which was present at the discussions, declined to comment.
Heightened trade tensions follow the United States imposing a fourfold tariff hike on Chinese EVs last month. The moves have been criticized in Beijing as protectionist measures threatening reciprocal action.
Charges from the EU could average 21% for firms cooperating in its subsidy investigation, or 38.1% otherwise. These are in addition to existing 10% import duties on Chinese electric cars.
As disputes escalate between major trading partners over vehicle sectors, Beijing has launched probes into imports of EU port and chemicals. De-escalation efforts will be crucial to maintaining stable supply chains in strategic industries on both sides.
