China urges France to help broker compromise on EV trade dispute with EU

In a heated trade dispute between China and the European Union, China has called on France to take an "active role" in nudging the EU towards a palatable solution for the electric vehicle (EV) industry on both sides. This comes as the EU continues to defend its position on key matters, including the imposition of tariffs on Chinese-made battery EVs.

The tensions stem from the EU's launch of an anti-subsidy investigation into imports of Chinese-made battery EVs last year, which culminated in the bloc voting for tariffs on those vehicles in October. In response, China has launched its own investigations into European pork and dairy products, and imposed temporary anti-dumping measures on imports of brandy from the EU.

During a meeting in Shanghai on Sunday, Chinese Commerce Minister Wang Wentao met with French junior trade minister Sophie Primas and urged Paris to help broker a compromise. Wang reiterated that the EU's investigation into Chinese EVs is a major concern that has "seriously hindered" China-EU auto industry cooperation.

In response, Primas stated that the EU refuses to escalate the situation and continues to trade with China "but will not yield to pressure on the essential points." She emphasised that the bloc will "continue to defend fairer competition that benefits everyone."

Primas is currently on a three-day visit to China to challenge the country over its import duties on brandy, which Paris calls political and unjustified. Wang, however, defended China's trade remedy investigations, stating that they were in accordance with the domestic industry's applications and complied with World Trade Organization rules, "unlike the EU" which was "rash" in launching its EV probe.

At the same time, Wang expressed China's willingness to work with the European Commission towards a "proper solution," though he did not elaborate further. The Chinese Commerce Minister also noted that Beijing's investigations into EU dairy and pork products were also initiated in response to domestic industry applications.

The escalating trade tensions between China and the EU highlight the complexities and challenges faced by both sides as they navigate the evolving global trade landscape. The outcome of this dispute could have far-reaching implications for the automotive industry, as well as broader economic relations between the two economic powerhouses.

As France takes on a mediating role, the pressure is on to find a mutually acceptable solution that balances the interests of both the European and Chinese EV industries, while also addressing the underlying issues that have led to the imposition of retaliatory measures. The coming weeks and months will be crucial as the two sides work to resolve this trade dispute and find a path forward that benefits all stakeholders.