EU offers China alternative to tariffs in EV dispute

The EU has offered Chinese electric vehicle (EV) manufacturers the alternative of entering into price undertakings to avoid the imposition of high tariffs. This mechanism allows individual Chinese EV makers to commit to selling their vehicles in the EU at or above a minimum import price, which would replace the anti-subsidy duties.

Details of the EU Offer

Minimum Import Price (MIP): The EU's guidance document outlines conditions for Chinese exporters to offer price undertakings, effectively setting a MIP for their EVs. The price must be sufficient to offset the injurious effects of the subsidies found in the EU's anti-subsidy investigation.

Individual Assessment: Each offer from an EV manufacturer will be assessed individually and fairly, in accordance with World Trade Organization (WTO) rules. This means a broadly applicable minimum price for all Chinese manufacturers is not the current approach.

Conditions: Offers can be strengthened by including commitments on sales volumes or plans for future investments within the EU.

Tariffs Remain the Default: The alternative is an option for companies subject to the EU's existing tariffs, which range up to 35.3%.

China's Ministry of Commerce has welcomed the guidance, stating that the progress reflects the spirit of dialogue and consultations between the two sides, and that the move could enable a "soft landing" in the trade dispute.