China And The EU Agree On Measures To Settle Their Dispute Over EV Import

China announced that it has reached an agreement with the European Union to export electric vehicles made in China to the EU market.

China’s Ministry of Commerce said the EU will issue guidelines on minimum prices for Chinese car exporters.

It is not specified whether the agreement includes the elimination of the 35.3 percent tariff imposed by the EU in 2024 on imports of Chinese electric vehicles, the price of which China subsidizes and is considered to export at unfair, dumping prices.

“This contributes not only to ensuring the healthy development of China-EU economic and trade relations but also to safeguarding the rules-based international trade order,” the Chinese Ministry of Commerce said in a statement.

The expansion of Chinese electric vehicle manufacturers’ offerings into foreign markets has alarmed automakers in Europe and the US.

The EU imposed tariffs to counter this, claiming that Chinese manufacturers benefit from “unfair state subsidies,” and the US imposed a 100 percent tariff on electric cars made in China in 2024.

The value of electric cars imported into Europe increased from $1.6 billion in 2020 to $11.5 billion in 2023. Most of these imports came from Western automakers that have factories in China, including Tesla and BMW.

EU officials have warned that domestic Chinese manufacturers are poised to capture a large share of the market by offering lower prices than European ones, thanks to their country’s large subsidies. These include large orders for government needs, low-interest loans from state-owned banks, cheap land for factories, tax breaks, and subsidized raw materials and parts from state-owned industries.

US tariffs effectively block almost all imports of Chinese electric vehicles. The European Union, on the other hand, needs cheaper electric cars from abroad to meet its goal of reducing greenhouse gas emissions by 55 percent by 2030.

• Also See: China’s BYD Overtakes Tesla As The World’s Biggest EV Maker