The European Commission stated on Friday (August 9) that it is confident its investigation into China’s national subsidies for electric vehicles and tariff measures comply with the rules of the World Trade Organization (WTO) and emphasized that the investigation will continue.
The EU investigation found that electric vehicles produced in China are receiving improper subsidies. In July this year, the EU imposed a temporary tariff of up to 37.6% on imported Chinese-made electric vehicles to protect domestic electric vehicle production.
On Friday, the Chinese authorities appealed to the WTO dispute settlement mechanism regarding the EU’s temporary anti-subsidy measures on electric vehicles, claiming that the EU’s investigation results and temporary tariffs lack factual and legal basis, seriously violating WTO rules.
The European Commission, responsible for handling all trade issues of the 27 EU countries, stated that it is carefully examining the details of China’s complaint to the WTO and will respond to China in due course according to WTO procedures.
A spokesperson for the Commission said, “The Commission is confident that its investigation and temporary measures comply with the WTO regulations.”
The spokesperson also stated that China’s complaint action “does not affect the schedule of the anti-subsidy investigation, which is still ongoing.”
Cases in the WTO typically take a long time to resolve. Since 2019, due to a lack of new appointments, the functioning of the WTO Appellate Body has been blocked, further weakening the effectiveness in resolving disputes. However, the EU and China have joined the “Multilateral Interim Appeal Arrangement” (MPIA), allowing them to resolve trade disputes between each other even when the WTO Appellate Body is stalled.
Earlier this week, EU Trade Commissioner Valdis Dombrovskis stated that the 27 EU member states would support imposing tariffs to combat China’s unfair trade practices.
The European Commission also announced this week as part of the investigation into China’s improper subsidies for electric vehicles, member states may be asked to demand tariffs on all imported Chinese electric vehicles from March this year. This is a strategy to prevent companies from flooding the market before the tariffs increase.
Previously, Chinese electric vehicle manufacturers rushed to send more electric vehicles to the EU before the new tariffs took effect on July 5, hoping to avoid retroactive tariffs.
According to Schmidt Automotive Research data, there was a significant increase in electric vehicle registrations in the EU in June this year, with over 202,000 new vehicles receiving their first registrations. In comparison, the average in April and May was 144,000 vehicles. By manufacturer, Chinese electric vehicle manufacturers held a market share of 12.4% in June, higher than the same period last year at 10.4%.
Chinese automakers are launching their transport ships to continue exporting to the European market. BYD’s first ship, the “BYD EXPLORER NO.1,” capable of carrying 7,000 vehicles, is en route to the EU and is expected to dock in Spain on Saturday.