MNI: Little Progress Likely In China-EU EV Dispute- EU Sources

MNI (BRUSSELS) - Progress on a solution to the European Union-China electric vehicle dispute looks difficult following intense negotiations between the two sides in the days since EU states backed the Commission’s proposed tariffs on Oct 4, EU trade sources told MNI.   

“There is no progress and it’s unlikely there will be any,” one source following talks said. 

Public comments from the Commission suggest little narrowing of the differences between the sides, stressing only that discussions are “ongoing” and that it remains “open” to a solution if all its red lines are met.  

The anti-subsidy tariffs are due to come into force by the end of the month and a solution before then would require a further vote by member states with no guarantee that it would win approval, making it unlikely that the launch of tariffs can now be avoided.

RETALIATION

In recent weeks China has opened an investigation into EU subsidies for its dairy sector, the outcome of which could potentially hit France, the Nordic states and the Netherlands – all of which voted for the tariffs - especially hard.  

“That’s the normal Chinese game,” one source said.

While temporary anti-dumping duties have already been imposed on brandy, hitting French cognac exports, a once-mooted retaliation against EU pork now looks less likely given Spain’s abstention in the recent tariff vote. 

EU officials have told MNI that China has floated the idea of voluntary limits on EV exports as well as minimum prices for vehicles, but the European response has been cool.

“The nature of the subsidies is the one the Commission has to stand by till the end,” whatever form the possible alternative takes,” the source said.

EU officials will also be cautious of rushing into a deal before the U.S. election. 

“If Trump wins then the Americans will be pushing on the Europeans [car exporters], which are already suffering,” the source said. "The Commission has no choice but to maintain the tariffs.”