The European Union and China agreed to explore establishing minimum prices for Chinese-made electric vehicles, serving as an alternative to the tariffs previously imposed by the EU, according to a spokesperson for the European Commission. Reports from the German newspaper Handelsblatt indicate that negotiations are currently underway.
Recently, EU Trade Commissioner Maroš Šefčovič engaged in discussions with China’s Commerce Minister Wang Wentao, during which both parties affirmed their commitment to investigating the concept of minimum pricing. The Chinese Commerce Ministry has announced that negotiations will commence immediately.
The EU Commissioner emphasised that any proposed minimum prices must be both effective and enforceable, mirroring the structure of the existing EU tariffs. Last October, the EU increased tariffs on Chinese-built electric vehicles to 45.3%. Nonetheless, both Brussels and Beijing are considering the prospect of lifting these tariffs in exchange for commitments to set minimum prices, referred to as price undertakings for imported vehicles.
The European Commission has expressed its readiness to continue negotiations with China regarding tariff alternatives. Current tariff rates include 17.0% for vehicles produced by BYD, 18.8% for Geely, and 35.3% for SAIC, in addition to the EU’s standard car import duty of 10%.
These discussions aim to resolve ongoing trade disputes that have also impacted French cognac producers following retaliatory trade measures from China. In the previous year, Beijing imposed punitive tariffs on French cognac, adversely affecting sales in one of the world’s largest markets for this product, which includes prominent brands such as Hennessy, Rémy Cointreau, and Pernod. This situation has unfolded concurrently with trade tensions involving the United States, particularly as US President Donald Trump has initiated a trade war with some of America’s closest trading partners, including the EU and China.
