EU could lift tariffs on Chinese EVs; to set minimum pricing

These developments are coming in the wake of U.S. President Donald Trump’s new tariff war which has had a big impact on automakers worldwide.

The European Union and China are agreeing to set minimum prices for Chinese-made electric vehicles instead of tariffs imposed by the EU last year. German newspaper Handelsblatt reported earlier on Thursday that negotiations had begun.

It is reported that EU trade commissioner Maros Sefcovic spoke with Chinese Commerce Minister Wang Wentao in the last 24 hours, and both sides agreed to look into setting minimum prices, an EU spokesperson said.

The EU increased tariffs on Chinese-built EVs to as much as 45.3% last October. The European Commission has said it is willing to continue negotiating an alternative to tariffs with China. Currently, the tariffs stand at 17.0% for vehicles made by BYD, 18.8% for Geely and 35.3% for SAIC, on top of the EU's standard car import duty of 10%.

These developments are coming in the wake of U.S. President Donald Trump’s new tariff war, which has had a big impact on automakers worldwide. These include Europe and China, which are the United States’ closest trading partners.

German auto industry association VDA welcomed the talks between the EU and China, calling the duties a "mistake" and advocating for a negotiated solution. "Regardless of current global developments, it must also be discussed here how to reduce obstacles and distortions in international trade, rather than building new hurdles," VDA said on Thursday.

German carmakers, which made a third of their sales last year in China, opposed the tariffs, worried about a trade conflict with the country's second most important trading partner after the U.S.

The deal between the EU and China could also cast a big blow to Tesla. The carmaker has seen a major decline in sales in Europe in recent times, despite being a dominant player in the market. If Chinese electric vehicles start bringing in the numbers after the deal, it would easily be a death blow to Tesla on the continent.

Source: Reuters