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China Urges EU to Cancel Planned Higher Tariffs and Comply with WTO Rules, State Media Reports

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Benjamin Hughes

June 24, 2024 - 20:45 pm

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China Urges European Commission to Revoke Tariff Decision by July 4 and Follow WTO Rules

China is calling on the European Commission to withdraw its decision to impose provisional tariffs on Chinese electric vehicles (EVs) by July 4 and adhere to World Trade Organization (WTO) regulations, as reported by Global Times, citing industry observers. This request comes in the wake of an agreement between both parties to initiate consultations regarding the European Union's (EU) anti-subsidy investigation into Chinese EVs.

Agreement to Begin Consultations on Anti-Subsidy Investigation

China and the European Union have agreed to start discussions on the EU's anti-subsidy investigation into Chinese EVs. This decision followed a meeting between China's commerce minister Wang Wentao and Valdis Dombrovskis, executive vice president of the European Commission. The Chinese government expressed hope that these discussions would lead to the revocation of the provisional tariffs, which are set to be implemented by July 4.

Provisional Tariffs on Chinese EVs

The European Union has proposed provisional duties of up to 38.1% on imports of Chinese electric vehicles. These tariffs are scheduled to take effect on July 4 if no resolution is reached during the discussions with Chinese authorities. This new tariff would be in addition to the existing standard 10% duty already imposed on imported EVs.

China's Opposition to Tariffs

China has strongly opposed the EU's decision to impose these tariffs, labeling it as blatant protectionism that could violate WTO rules. On June 14, China's commerce ministry condemned the tariff plan, asserting that such measures are unfair and could harm international trade relations. A Chinese official further criticized the EU's probe into Chinese EVs as overly selective and not credible.

Economic and Trade Cooperation Between China and the EU

Observers have noted that revoking the tariff decision would benefit both China and the European Union, given the significant economic and trade cooperation between the two entities. The interconnected nature of their economies means that both sides stand to gain from maintaining stable trade relations and avoiding protectionist measures.

Potential Countermeasures from China

Experts warn that the EU's imposition of tariffs could trigger countermeasures from China, potentially leading to a trade conflict that would harm both parties. The Global Times report highlighted the mutual dependency between China and the EU, suggesting that an amicable resolution to the tariff dispute is in the best interest of both sides.

The Impact of the Tariff Decision on Global Trade

The imposition of tariffs on Chinese EVs by the European Union has broader implications for global trade. Protectionist measures can disrupt the flow of goods and services, leading to increased costs for consumers and businesses. The resolution of this tariff dispute will be closely watched by the international community as it may set a precedent for future trade relations.

The Role of the World Trade Organization

Adhering to WTO rules is crucial in maintaining fair and equitable trade practices. China's call for the EU to follow these regulations underscores the importance of a rules-based international trading system. Such a system helps prevent unilateral actions that can destabilize global trade and economic cooperation.

Strategic Importance of the EV Market

The electric vehicle market is of strategic importance to both China and the European Union. As the world transitions to more sustainable modes of transportation, maintaining open and fair trade in this sector is essential. Tariffs and other protectionist measures could hinder the growth of the EV market and slow the adoption of cleaner technologies.

Conclusion: A Call for Fair Trade Practices

China's appeal to the European Commission to revoke the planned tariffs on Chinese EVs and adhere to WTO rules is a significant development in international trade relations. By advocating for fair trade practices and a rules-based system, China aims to prevent disruptions in the global EV market and promote economic stability. The outcome of the ongoing discussions between China and the EU will have far-reaching implications for the future of international trade and economic cooperation.