Beijing and Brussels seem to have reached an agreement on an issue that has split bilateral relations in two: the exports of Chinese-made electric vehicles to the Old Continent. The agreement, reached after months of threats culminating in heavy European duties on electric cars and Chinese trade retaliation, was announced by the Chinese Ministry of Commerce at the same time as the publication of the EU guidelines on minimum prices for Chinese automotive exporters.
The points of the agreement: minimum prices on imported cars
In fact, on January 12, the Commission published a guide document that defines the conditions under which Chinese manufacturers can submit commitment offers on the “minimum prices” of car models, with the aim of responding to the European Union’s concerns about the distorting effects of state subsidies. In Brussels’ idea, the proposals can be strengthened by including commitments to guarantee annual shipment volumes of the models – which must be few and defined – and planned future investments in the European Union market, under penalty of revocation of the offer. It now remains to be seen whether and which Chinese companies will submit offers capable of satisfying the conditions set by the Commission. In any case, offers must comply with EU legal criteria, be practicable, reduce the risk of cross-compensation and may be individual or joint. But the final word will still be up to the Commission, which will evaluate the offer and decide whether to accept it, only after consulting with the Member States.
The point of conflict in recent years between Brussels and Beijing concerns state subsidies: after an anti-subsidy investigation by the Commission, Brussels went so far as to impose heavy duties on Chinese electric cars in 2024 (ranging between 7.8 percent and 35.3 percent) to counter the influx of low-cost vehicles from China onto its markets, claiming that Chinese car manufacturers benefited from government subsidies deemed unfair.
However, the agreement has the advantage of realigning the tense relations between China and the EU. According to what is read in the note from the Chinese ministry, Brussels and Beijing confirm “the ability and willingness to resolve differences through dialogue and consultation within the framework of WTO rules and to preserve the stability of the supply chain and supply chain of the automotive industry between China and the EU and at a global level”.
What happens to the tariffs on Chinese electric cars imposed by Brussels
However, there is another doubt to be resolved and it concerns the future of tariffs. Beijing did not directly mention whether the agreement would lead to an end to tariffs of up to 35.3 percent that the EU has imposed on imports of Chinese electric vehicles in 2024. But one answer comes from the lines introduced by the EU: the evaluation and adoption of the minimum price of imported electric cars serves to avoid the tariffs introduced by the European Union in October 2024.
