Trade War Threatens Electric Car Industry: China Urges European Union To Revoke Tariffs

Chinese car manufacturer Nio released the luxury EL8 SUV in Europe on June 19. (Doc. Nio Global)

JAKARTA - The electric car industry is threatened with a new trade war. China urges the European Union to cancel its temporary high import duty on electric vehicles made in China which will take effect on July 4.

As previously reported by VOI, the European Union plans to impose an import duty of up to 38.1 percent on imported electric cars from China. This step was taken by the European Union because they suspect there is an excessive and unfair subsidy given by the Chinese government to their electric car manufacturers.

China certainly does not remain silent. Launching Reuters, June 24, China has repeatedly asked the European Union to cancel its import duties. Instead of engaging in other trade wars, as has happened with the United States, China prefers a negotiation route. However, China insists it will take action to protect Chinese companies if trade wars persist.

The two sides agreed to restart talks following communications between EU Commissioner Valdis Dombrovskis and Chinese Trade Minister on Saturday. This agreement comes during a visit by the German Economy Minister to China. Germany itself stated the door to a discussion "stay open".

Chinese state media, the Global Times, cited the opinion of observers who suggested the best scenario was the cancellation of import duties by the European Union before July 4.

However, the European Commission, analysts and European trade lobby groups insist that talks will be a complicated process. They think China needs to come with the intention of providing a big concession.

"No one dares to do this now. Especially before the election in France," said Alicia Garcia H Wayel, senior researcher at Bruegel, an influential European Union affairs think tank, about the possibility of canceling import duties.

"The Commission cannot change the decisions it has been considering for months," he added. "China is indeed putting pressure on EU member states, but they need to vote with a qualified majority against the Commission."

The import fee is planned to be finalized on November 2, after the European Union's anti-dumping subsidy investigation is complete.

"The European Union emphasizes that any outcome of negotiations from their investigation must be effective in dealing with harmful subsidies," a Commission spokesman said on Monday.