China, EU on 'Electric Vehicle Tariffs' "Considering Tariff Increase on High-Displacement Vehicles"

"Request to Dispatch Technical Team to EU for Additional Negotiations on China Electric Vehicle Tariff Issue"

China has announced that it is considering raising tariffs on imported high-displacement vehicles.

Electric vehicles produced by Chinese electric car manufacturer BYD parked at the Taichang Port dock in Jiangsu Province, China, before being loaded onto a car carrier ship. Photo by Yonhap AFP [Image source=AFP Yonhap News]

On the 17th, China Central Television (CCTV) reported that a spokesperson for the Chinese Ministry of Commerce said at a regular press conference that "after considering all factors, a cautious decision will be made."

High-displacement internal combustion engine vehicles refer to cars with engine displacements of 2500cc or more that use gasoline or diesel as fuel.

Earlier, Chinese automobile companies proposed to the government to actively consider raising tariffs on imported high-displacement gasoline vehicles with engine displacements of 2.5 liters or more, after the European Union (EU) announced on the 4th that it would impose a "tariff bomb" of up to 45.3% tariffs on Chinese-made electric vehicles following a vote by its 27 member states.

The social media account Yuyuantantian (玉淵譚天) of the parent company of CCTV, China Central Radio and Television, stated in June that "China is internally advancing procedures to raise tariffs on imported high-displacement vehicles," adding, "If raised, European brands such as BMW and Mercedes-Benz will be the first to be hit."

Ultimately, this move by China is interpreted as a response to the EU's finalized tariff plan. In addition to the existing general tariff of 10%, an additional tariff rate of 7.8 to 35.3 percentage points will be imposed. The final tariff rate will range from 17.8% to 45.3%, and will be applied for five years starting from the 31st of this month.

The EU intends to continue negotiations with China, leaving the possibility that the imposition of finalized tariffs could be halted if an agreement is reached. However, if negotiations fail, it is expected that the trade dispute between the EU and China will intensify further.

In fact, on the 8th, the Chinese Ministry of Commerce announced the implementation of provisional anti-dumping measures on EU-produced brandy. This is interpreted as targeting France, which supports the imposition of high tariffs on Chinese electric vehicles.

A spokesperson for the Chinese Ministry of Commerce explained on the same day, "To continue negotiations, we have officially requested the European technical team to visit China as soon as possible," adding, "We have completed all preparations and are awaiting a response from the European side."

Earlier, on the 12th, the Chinese Ministry of Commerce announced that from the 20th of last month, the China-EU negotiation teams held intensive talks eight times over about 20 days in Brussels, Belgium, but due to significant differences between the two sides, no agreement was reached.