China challenges Brussels’ electric car tariffs with WTO complaint

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Manage your delivery channels hereRemove from myFTChina challenges Brussels’ electric car tariffs with WTO complaint Beijing says EU trade measures undermine global co-operation on climate A large number of new energy vehicles are ready to be shipped for export in ChinaThe European Commission announced in June that it would sharply increase tariffs on Chinese-made electric vehicles © CFOTO/Future Publishing/Getty Images

Edward White in Shanghai and Alice Hancock in Brussels

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Beijing has hit back against EU tariffs on Chinese electric vehicle exporters, filing a complaint with the World Trade Organization in an escalation of the trade dispute with Brussels.

In early June, the European Commission announced it would sharply increase its tariffs on Chinese-made electric vehicles following a months-long investigation which found that Beijing was unfairly subsidising its car industry.

The measure is still provisional, pending a vote by EU member states in November. The EU’s trade chief Valdis Dombrovskis told the Financial Times last week that he expected them to approve the tariffs.

The levies vary across companies, which include Geely and BYD, the world’s largest electric vehicle maker, but could be close to 50 per cent for carmakers judged not to have co-operated with the EU probe.

In announcing Beijing’s WTO complaint on Friday, China’s ministry of commerce said that the EU’s findings seriously violated WTO rules and undermined global co-operation on climate change.

The ministry urged the EU to “immediately correct its wrong practices”, safeguard economic and trade co-operation and the stability of the electric vehicle industry.

The European Commission said it was “carefully studying” the details of the Chinese complaint and would “will react to the Chinese authorities in due course according to the WTO procedures”.

“The commission is confident of the WTO-compatibility of its investigation and provisional measures,” it added.

Dombrovskis has defended the tariffs, arguing that they were not “prohibitive”.

The WTO complaint marks the latest in a series of mild retaliatory measures against what Beijing describes as against rising European protectionism. Some China trade experts have warned Beijing against stronger measures that could damage the world’s second-biggest economy which is already struggling from slower growth.

In January, China launched an anti-dumping probe into French cognac imports, a move targeted at punishing France for championing the electric vehicle probe. And in mid-June, less than a week after Brussels said it would impose tariffs on electric vehicle shipments from China, Beijing opened an anti-dumping investigation into EU pork imports in a move the European agricultural industry said would hit farmers in Spain, the Netherlands, Denmark, Germany and Belgium.

For the EU, the electric vehicle tariffs mark part of a more aggressive stance on trade as it seeks to protect its industry, which is subject to more stringent environmental standards, from cheaper international imports.

This year, Brussels has also launched trade probes into wind turbine and solar manufacturers and announced anti-dumping measures against imports of Chinese biofuels, which will come into effect next week.

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