EU declines minimum price proposals from Chinese EV exporters

The European Commission has disclosed that it received proposals from Chinese electric vehicle (EV) manufacturers for minimum import prices into the European Union, a strategy aimed at avoiding potential tariffs. However, the Commission has rejected all of these offers.

This development comes in the context of an ongoing anti-subsidy investigation being conducted by the Commission into EVs manufactured in China. The Commission explained that several EV exporters had submitted what are known as "price undertakings." These undertakings represent commitments from exporters to adhere to minimum import prices as a means of counterbalancing subsidies they may have received.

A spokesperson for the Commission elaborated on the evaluation processsaid, "Our review focused on whether the offers would eliminate the injurious effects of subsidies and could be effectively monitored and enforced. The Commission has concluded that none of the offers met these requirements."

While the Commission refrained from divulging specific details of the offers, they emphasised that each proposal underwent a thorough review to ensure compliance with both World Trade Organization (WTO) and EU anti-subsidy regulations.

Despite rejecting the current proposals, the Commission maintains an openness to negotiated solutions. The spokesperson clarified, "The Commission remains open to a negotiated solution, but it must fully comply with WTO rules and fully remedy the injurious effects of subsidies identified."

The timing of these developments is significant, as EU trade chief Valdis Dombrovskis is scheduled to meet with Chinese Commerce Minister Wang Wentao in the coming week. This meeting could potentially serve as a platform for further dialogue on the issue.

Meanwhile, the Commission is on the brink of proposing substantial final tariffs on EVs manufactured in China. These proposed duties could reach up to 35.3 per cent, which would be applied in addition to the EU's standard 10 per centimport duty on cars. This potential cumulative tariff of over 45 per centrepresents a significant barrier for Chinese EV manufacturers seeking to enter or expand in the European market.

The implementation of these final duties is subject to a voting process within the EU. For the tariffs to be blocked, a qualified majority of EU members would need to vote against them. Specifically, this would require 15 out of the 27 EU member states, representing at least 65 per centof the EU's population, to oppose the levies. Barring such opposition, the new tariffs are set to be implemented by the end of October.