The European Union and China have agreed to look into setting minimum prices on Chinese-made electric vehicles (EVs) instead of tariffs imposed by the EU last year, a European Commission spokesperson said.
German newspaper Handelsblatt reported earlier on April 10 that negotiations had already begun.
Trade commissioner Maros Sefcovic spoke with China’s commerce minister Wang Wentao over the prior 24 hours and both sides agreed to look into setting minimum prices, the EC spokesperson said.
Sefcovic has previously said any minimum prices would need to be as effective and enforceable as the EU tariffs.
Previous minimum price deals agreed by the EU have been for homogenous commodities, rather than complex products such as cars. The EC has said it believed a single minimum price would not be adequate to counter injury caused by subsidies.
The EU increased tariffs on Chinese-built EVs to as much as 45.3 per cent last October but Brussels and Beijing have floated the idea of lifting the tariffs through possible commitments to minimum prices, known as price undertakings for imported cars.
The EC has said it was willing to continue negotiating an alternative to tariffs with China, which have included tariffs of 17 per cent for vehicles made by BYD, 18.8 per cent for Geely and 35.3 per cent for SAIC, on top of the EU’s standard car import duty of 10 per cent.
The discussions to potentially find a truce over the longstanding spat that has also roiled French cognac makers as Beijing took retaliatory trade action, came as US President Donald Trump embarked on a trade war with some of the US’ closest trading partners, including the EU and China.
Beijing slapped punitive tariffs on French cognac last year, hurting sales in the world’s second-largest economy and a major brandy market for global companies including Hennessey, Remy Cointreau and Pernod Ricard.
The German Association of the Automotive Industry (VDA) welcomed the talks between the EU and China, calling the duties a “mistake” and advocating for a negotiated solution.
“Regardless of current global developments, it must also be discussed here how to reduce obstacles and distortions in international trade, rather than building new hurdles,” the VDA said on April 10.
German carmakers, which made a third of their sales last year in China, had opposed the tariffs, worried about a trade conflict with the country’s second-most important trading partner after the US.
