The European Union (EU) faces significant challenges in its negotiations with China over a possible alternative to tariffs on electric vehicles (EVs), with little prospect of a quick solution, Bloomberg reported citing sources.
Despite a round of talks in Beijing in which both sides reportedly discussed some progress, the chances of a meaningful breakthrough remain slim for now, people familiar with the matter told the publication.
The report states that China has not yet met the EU’s stringent requirements for an enforceable settlement equivalent to the recently adopted anti-subsidy tariffs.
The EU and China will continue technical talks this week, but the path to an agreement is still unclear.
The two sides are exploring an agreement on “price undertakings,” a complex mechanism to control export prices and volumes to avoid tariffs.
The recent negotiations have largely revolved around establishing a communication channel between Brussels and Beijing and averting the danger of cross-compensation.
This concern stems from the possibility that any minimum import prices for electric vehicles could be offset by sales of other goods, such as hybrid vehicles and accessories.
Disagreements also remain over the feasibility of deals with individual automakers, including European companies with joint ventures in China, the report said.
The EU insists such agreements would be in line with World Trade Organization guidelines, while China is calling for a comprehensive deal led by a Chinese trade body.
In response to the EU’s EV tariffs, China has warned against imposing retaliatory tariffs on European dairy, pork and cognac.
The EU has stated that it wants to protect its interests in these matters, while opposing attempts to merge the disputes into a larger compromise.
Recently, China ordered its car manufacturers to suspend significant investments in EU countries. The move was intended to put pressure on the European Union in negotiations on alternatives to tariffs on electric vehicles.
“EU Cool on Prospects for Quick Deal in EV Tariff Talks with China” was originally created and published by Just Auto, a brand owned by GlobalData.
The information on this site has been included in good faith for general information purposes only. It is not intended to amount to advice on which reliance should be placed and we make no representation, warranty or guarantee, express or implied, as to its accuracy or completeness. You must obtain professional or specialist advice before taking or refraining from any action on the basis of the content on our site.
