China-EU spat over EVs here to stay
China isn't backing down when it comes to electric vehicles (EVs).
Commerce Minister Wang Wentao delivered the message to the EU at a Sunday meeting in Paris with the bloc's officials and Chinese EV companies.
- The meeting was to discuss Chinese EV investments in the EU.
Some context: Chinese-made EVs are finding significant success in the EU market, with their combined market share set to grow from 19.5% in 2023 to 25.3% this year (FT).
- In September, the European Commission (EC) launched an anti-subsidy investigation into China's EV exports.
More context: In March, the EC said it had found “sufficient evidence” of state subsidies and hinted at the possibility of provisional tariffs as early as July – four months ahead of the investigations' conclusion (Bloomberg).
Wang used the meeting to hit back at the prospect of tariffs:
- “Chinese EV companies' rapid development is driven by technological innovation, integrated supply chains, and market competition, not subsidies. The accusations of "overcapacity" from the US and Europe are unfounded.”
- “[Beijing will] actively support companies in protecting their legitimate rights and interests."
Get smart: China’s EV onslaught poses an existential threat to the most important pillar of European industry – something Brussels won't accept.
- But Beijing is desperate to avoid trade barriers undermining its EV industry – which it considers vital to achieving long-term economic and foreign policy goals.
The upshot: The EU will slap tariffs on China's EV exports later this year.
- Expect a strong response from Beijing.