China has lodged a complaint with the WTO over the EU’s decision to impose anti-subsidy duties on Chinese electric vehicles (EV), escalating a dispute that is straining their already fraught relationship.
Beijing brought the case to the WTO’s dispute settlement mechanism yesterday, the Chinese Ministry of Commerce said.
The aim is to “safeguard the development rights and interests” of the EV industry, it added.
Photo: Bloomberg
“Judgment in the EU’s provisional conclusion lacks factual and legal foundation,” a ministry spokesperson said. “It severely violated WTO rules and undermined the global cooperation on dealing with climate change.”
“We urge the EU to immediately correct its wrongdoing, and together safeguard China-EU economic and trade cooperation as well as the stability of EV supply chain,” the spokesperson added.
Beijing’s relationship with the EU has hit fresh lows in recent months, as the bloc brings its China policy closer to that of the US. The EU last month imposed provisional tariffs on some car imports from China that would raise rates to as high as 48 percent after a months-long probe into Chinese state aid to EV makers.
The move drew swift condemnation from Beijing. China has already threatened retaliation against European farmers and plane makers, and launched an anti-dumping probe targeting the French spirits industry.
Chinese state-owned automaker SAIC Motor Corp (上海汽車集團) is subject to the highest tariff of 37.6 percent on top of an existing 10 percent rate, while Geely Holding Group Co (吉利) and BYD Co (比亞迪) have been hit with added charges of 19.9 percent and 17.4 percent, respectively.
The EV sector has increasingly been caught up in tensions over trade and geopolitics as the world transitions away from the internal combustion engine. China has become a world leader, partly by investing lots of money after identifying EVs as crucial for the environment and the economy.
The US has also sought to limit the entry of Chinese-made EVs, levying tariffs of more than 100 percent, as it said that Beijing is flooding the world with cheap goods, particularly in new green industries. Canada is also considering similar steps.
China has filed a WTO complaint over the US’s own subsidies for EVs, saying the rules are discriminatory. The administration of US President Joe Biden imposed restrictions that mean vehicles containing battery components or raw materials sourced from “foreign entities of concern” would no longer qualify for purchase tax credits of as much as US$7,500.
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