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China warns to retaliate against EU`s proposed tariffs on Chinese-made electric vehicles
(MENAFN) Amidst rising tensions, China has issued a warning to retaliate against the European Union's proposed tariffs on Chinese-made electric vehicles (EVs). The Chinese Commerce Ministry conveyed this message in a letter addressed to the European Union's trade chief, signaling potential consequences if Brussels proceeds with its tariff-hike plans.
The dispute stems from the significant increase in the import of Chinese EVs into the European Union, which surged to USD11.5 billion in 2023, up from USD1.6 billion in 2020. Brussels attributes the price discrepancy between Chinese and European EVs to the financial support provided by the Chinese government to domestic manufacturers.
Last September, the European Commission initiated an anti-subsidy investigation to address concerns regarding state aid provided to Chinese EV manufacturers. This investigation could lead to the imposition of additional tariffs, adding to the existing 10% levy applied to all imported EVs.
In response to the European Union's probes, China's Commerce Ministry sent a five-page letter to European Union trade chief Valdis Dombrovskis, expressing frustration and urging for a reset to prevent further escalation. The letter reportedly warned of potential retaliation, with initial measures targeting sectors such as aviation and agriculture.
Targeting agriculture could have significant implications for the European Union, as China ranks as the third-largest consumer of the bloc's agricultural output. Additionally, potential measures against the aviation sector could impact European aircraft manufacturer Airbus, which is a key supplier to the Chinese market.
The European Union is expected to announce provisional tariffs on Chinese electric vehicles in the near future, further exacerbating tensions between the two economic powers and raising concerns about potential trade disruptions.
The dispute stems from the significant increase in the import of Chinese EVs into the European Union, which surged to USD11.5 billion in 2023, up from USD1.6 billion in 2020. Brussels attributes the price discrepancy between Chinese and European EVs to the financial support provided by the Chinese government to domestic manufacturers.
Last September, the European Commission initiated an anti-subsidy investigation to address concerns regarding state aid provided to Chinese EV manufacturers. This investigation could lead to the imposition of additional tariffs, adding to the existing 10% levy applied to all imported EVs.
In response to the European Union's probes, China's Commerce Ministry sent a five-page letter to European Union trade chief Valdis Dombrovskis, expressing frustration and urging for a reset to prevent further escalation. The letter reportedly warned of potential retaliation, with initial measures targeting sectors such as aviation and agriculture.
Targeting agriculture could have significant implications for the European Union, as China ranks as the third-largest consumer of the bloc's agricultural output. Additionally, potential measures against the aviation sector could impact European aircraft manufacturer Airbus, which is a key supplier to the Chinese market.
The European Union is expected to announce provisional tariffs on Chinese electric vehicles in the near future, further exacerbating tensions between the two economic powers and raising concerns about potential trade disruptions.
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