Yuyuan Tantian warns Europe over proposed PHEV duties

China has put Europe on notice over its approach to trade defense.

ICYMI: Last week, German media reported that the European Commission is planning to impose duties on plug-in hybrid electric vehicles (PHEVs) imported from China.

• The move mirrors the EU's 2024 decision to impose tariffs on Chinese battery electric vehicles (BEVs) – although the two sides have since agreed Chinese automakers can set export price floors to replace the existing tariffs.

On June 28, the CCTV-affiliated social media account Yuyuan Tantian warned Europe not to try the same trick twice:

• “The EU believes…that it has mastered the tactic of 'setting the rules first, then applying pressure,' and believing this approach will secure greater leverage at the negotiating table."
• "If the EU insists on treating negotiations as a mere formality, China is fully capable of handling a scenario where economic and trade relations deteriorate further or even plunge to freezing point."
• "China does not desire such an outcome, but it does not fear it either."

Get smart: Yuyuan Tantian's commentary isn't just about PHEVs – it's a stark warning that any approach that first freezes out Chinese exports and then hashes out the details will be met with retaliation.

• China's response to potential PHEV duties will determine just how much pain Beijing is willing to dish out to make its point.