Electricity dispute: Brussels rejects Chinese proposals

As EC spokesman Olof Gill said on Thursday, the details of the Chinese offers are confidential. “However, we can confirm that the Commission has carefully analysed the offers based on the anti-subsidy rules of the World Trade Organisation (WTO) and the EU. We have analysed whether the offers would eliminate the harmful effects of the subsidies and whether they could be effectively monitored and enforced. The Commission has concluded that none of the offers meet these requirements,” the spokesman added. However, the EC is still holding talks with China on subsidies and tariffs, and EC Vice-President Valdis Dombrovskis will meet with Chinese Trade Minister Wang Wentao in Brussels on 19 September.

The Chinese minister's visit to Europe will take place shortly after the Prime Minister's visit Spain Pedro Sanchez in China earlier this week, during which he surprisingly said the EU should reconsider its position on tariffs on electric cars from China. The EU is on the verge of imposing final tariffs of up to 35.3 percent on electric vehicles made in China. The new tariffs are to be added to the standard 10 percent import duty on cars. The decision must be approved by member states. The tariffs will come into effect unless 15 EU members representing 65 percent of the EU population vote against them. Spain has so far been a major supporter of EU tariffs on Chinese-made electric vehicles, Reuters reported. “We don’t need another trade war. We need to reconsider our position,” Sanchez said in China on Wednesday, changing his government’s position.

European Commission did not want to comment on Sanchez's statements on Thursday.

The duties, known as countervailing, are to be imposed on all electric vehicles manufactured in the People's Republic of China, including those manufactured there by European companies. The reason is the subsidization of electric vehicle production by the Chinese authorities. As a result, they are much cheaper than those manufactured in the EU, and European manufacturers cannot cope with unfair competition. China is the largest producer of electric vehicles in the world. Global exports of these cars from the Middle Kingdom increased by 70% in 2023, reaching a value of USD 34.1 billion. The EU is the largest recipient of electric vehicles from the People's Republic of China; it accounts for almost 40% of Chinese exports. In 2023, EU countries purchased Chinese cars worth EUR 3.5 billion, which is almost 40% more than in the previous year. This has raised concerns in Brussels and some EU capitals, because the prices of Chinese electric cars are usually 20% lower than models manufactured in the EU.