China and EU fail to reach agreement on EV tariffs

China and the European Union have hit a roadblock in their negotiations to reduce EU tariffs on Chinese-made electric vehicles (EVs). The dispute arises from Brussels accusing Chinese carmakers of flooding the EU market with inexpensive EVs, undermining local car production and posing a threat to auto industry jobs in Europe.

The EU retaliated by planning tariffs of up to 35.3% on imported EVs from China, citing unfair competition due to Beijing’s substantial subsidies to its auto sector. China has responded by warning of a potential trade war if the EU refuses to reconsider. Meanwhile, China set a minimum price of €30,000 for EVs exported to Europe in an attempt to avoid the impending tariffs, a proposal that was rejected by EU officials.

Despite “important progress” made during negotiations, China’s Commerce Ministry stated that “major differences” still exist between the two parties. European Council president Charles Michel remains hopeful for a resolution in the near future, emphasizing the need for fair competition and a balanced economic relationship.